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Country Profile 2007

Côte d'Ivoire This Country Profile is a reference work, analysing the country's history, politics, infrastructure and economy. It is revised and updated annually. The Economist Intelligence Unit's Country Reports analyse current trends and provide a two-year forecast.

The full publishing schedule for Country Profiles is now available on our website at www.eiu.com/schedule The Economist Intelligence Unit 26 Red Lion Square London WC1R 4HQ United Kingdom

The Economist Intelligence Unit

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ISSN 1351-0576

Symbols for tables "n/a" means not available; "�" means not applicable

Printed and distributed by Patersons Dartford, Questor Trade Park, 151 Avery Way, Dartford, Kent DA1 1JS, UK.

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© The Economist Intelligence Unit Limited 2007

February 2007

Country Profile 2007 www.eiu.com © The Economist Intelligence Unit Limited 2007

Comparative economic indicators, 2006

Gross domestic product(US$ bn)

Sources: Economist Intelligence Unit estimates; national sources.

Gross domestic product(% change, year on year)


Consumer prices(% change, year on year)


Gross domestic product per head(US$)


0.0 5.0 10.0 15.0 20.0

Guinea-Bissau

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Togo

Guinea

Mauritania

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Benin

Mali

Burkina Faso

Senegal

Ghana

Nigeria

0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0

Senegal

Togo

Guinea-Bissau

Guinea

Benin

Niger

Mali

Gambia

Burkina Faso

Nigeria

Ghana

Mauritania

0 200 400 600 800 1,000 1,200

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Guinea

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Guinea-Bissau

Benin

Mauritania

Nigeria

Ghana

Guinea

115.6

14.1 25.0

Côte d'Ivoire 1

© The Economist Intelligence Unit Limited 2007 www.eiu.com Country Profile 2007

Contents

Côte d'Ivoire

3 Basic data

4 Politics 4 Political background 7 Recent political developments 13 Constitution, institutions and administration 15 Political forces 18 International relations and defence

23 Resources and infrastructure 23 Population 24 Education 25 Health 25 Natural resources and the environment 26 Transport, communications and the Internet 29 Energy provision

30 The economy 30 Economic structure 32 Economic policy 34 Economic performance 36 Regional trends

36 Economic sectors 36 Agriculture 40 Mining and semi-processing 42 Manufacturing 43 Construction 44 Financial services 45 Other services

45 The external sector 45 Trade in goods 47 Invisibles and the current account 47 Capital flows and foreign debt 48 Foreign reserves and the exchange rate

50 Regional overview 50 Membership of organisations

55 Appendices 55 Sources of information 56 Reference tables 56 Population 56 Transport statistics 56 Electricity production and consumption 57 Petroleum production and consumption

2 Côte d'Ivoire


57 Government finances 57 Money supply 58 Interest rates 58 Gross domestic product 58 Gross domestic product by expenditure 58 Prices 59 Production of main cash crops 59 Gold, oil and gas production 59 Manufacturing production 59 Construction statistics 60 Stockmarket indicators 60 Main composition of trade 60 Main trading partners 61 Balance of payments, IMF series 62 Net official development assistance 62 External debt, World Bank series 63 Foreign reserves 63 Exchange rates

Côte d'Ivoire 3


Côte d'Ivoire

Basic data

322,463 sq km

18.2m (mid-2005; IMF estimate)

Population in !000 (at the 1998 census)

Abidjan 2,878 Bouaké 462 Yamoussoukro 299 Daloa 173

Tropical

Hottest months, February-April, 24-32°C (average daily minimum and maximum); coldest month, August, 22-28°C; driest month, January, 41 mm average rainfall; wettest month, June, 495 mm average rainfall

French, Dioula, Baoulé, Bété and other local languages

Metric system

CFA franc; fixed to the euro at a rate of CFAfr656:�1. Average exchange rate in 2006: CFAfr522.9:US$1; exchange rate on February 18th 2007: CFAfr499.5:US$1

January-December

GMT

Fixed: January 1st, Labour Day (May 1st), Independence Day (August 7th), Assumption (August 15th), All Saints! Day (November 1st), Peace Day (November 15th), Christmas (December 25th)

Variable (according to Christian and Muslim calendars"may vary): Prophet!s birthday (March 31st), Easter Monday (April 9th), Ascension Day (May 17th), Whit Monday (May 28th), Eid Al Fitr (October 13th), Tabaski (December 20th)

Population

Main towns

Climate

Weather in Abidjan (altitude 20 metres)

Languages

Measures

Currency

Financial year

Time

Public holidays in 2006

Land area

4 Côte d'Ivoire


Politics

Once considered to be one of the most stable countries in Sub-Saharan Africa, Côte d!Ivoire has experienced a collapse of political order since 1999, degenerating into civil war in September 2002. The main parties in the conflict signed the Marcoussis peace accord in January 2003, and a national reconciliation government was installed in March 2003. However, the country remained divided in two, with the north controlled by the former rebels, known as the New Forces, and the south under government control. At the end of October 2005 the scheduled presidential election had to be postponed because little of the accord had been implemented, reflecting disagreements over the interpretation of the reform agenda. To forestall a constitutional vacuum, the UN Security Council extended the mandate of the president, Laurent Gbagbo, and Charles Konan Banny, the former governor of the regional central bank, was appointed prime minister with extensive executive authority. However, the new national unity government was able to take only small steps towards its mission of holding elections by October 2006, forcing the international community to extend the transition period by another year, with Mr Banny remaining as prime minister. This pattern of failure to meet election deadlines looms large over the current timetable, which theoretically requires elections by October 2007.

Political background

Côte d!Ivoire became independent in August 1960, with the francophile Félix Houphouët-Boigny as president. Mr Houphouët-Boigny came to dominate the country!s political life, and in the 1960s and 1970s presided over Côte d!Ivoire!s emergence as one of Africa!s few stable and economically successful countries. His party, Parti démocratique de Côte d!Ivoire-Rassemblement démocratique africain (PDCI-RDA, known as the PDCI), became similarly dominant. There was remarkably little internal strife, and no significant external threat. The president avoided expenditure on a costly"and possibly untrustworthy"army, with national defence largely entrusted to France. Côte d!Ivoire!s success as an exporter of cocoa, coffee, timber and tropical fruits was another important factor in its stability. These exports quickly enabled the country to achieve an enviable level of prosperity. The number of French people working in the country came to exceed that in colonial times, and high-rise buildings transformed the Abidjan skyline. Called in by the PDCI regime to contribute to the country!s development, immigrants arrived from Burkina Faso, Guinea, Mali and other neighbouring countries, mostly to work as seasonal workers on cocoa and coffee plantations. Many settled in Abidjan and in the fertile farming regions in the centre of the country.

During the 1980s commodity prices fell and Côte d!Ivoire began to face serious economic and social problems. As Mr Houphouët-Boigny declined into senility, popular dissent increased and by the beginning of the 1990s demonstrations and strikes had become commonplace. The first multiparty elections were held in 1990 and were won by the PDCI and Mr Houphouët-Boigny, who defeated

Félix Houphouët-Boigny rules for 35 years

A turbulent fin de régime

Côte d'Ivoire 5


the Front populaire ivoirien (FPI) and Mr Gbagbo amid accusations of vote-rigging. For the first time, Mr Houphouët-Boigny established the post of prime minister, appointing Alassane Ouattara, an economist and former governor of the regional central bank, Banque centrale des Etats de l!Afrique de l!ouest (BCEAO). Mr Ouattara conducted an economic reform programme in the face of significant resistance within the ruling party, particularly from the president of the National Assembly, Henri Konan Bédié. Upon Mr Houphouët-Boigny!s death in December 1993, Mr Ouattara and Mr Bédié both vied for the succession, which Mr Bédié eventually won by invoking constitutional provisions transferring power to the speaker of the National Assembly in the event of the death of the president, while Mr Ouattara left the country to take up a post at the IMF in Washington.

Mr Bédié began consolidating his own power, moving his loyalists into key positions in the administration and sidelining those sympathetic to Mr Ouattara. A pro-Ouattara party, Rassemblement des républicains (RDR), broke away from the PDCI in June 1994. Mr Bédié was re-elected with 95% of the vote in the October 1995 presidential election, which both the FPI and the RDR boycotted. However, all the major political parties did take part in the legislative election in November 1995, in which the PDCI retained an overwhelming majority in parliament. Support for the Bédié government started to flag in 1998 as the economy showed signs of faltering. In mid-1998, as both domestic and international support for Mr Bédié waned rapidly, the National Assembly passed broad constitutional changes. The electoral code was amended, requiring that a presidential candidate should have an Ivorian father and be able to demonstrate ten years of continuous residence. This was intended to bar Mr Ouattara from standing in the 2000 presidential election, on the grounds of "dubious nationality". In early 1999 the IMF and the EU announced that they had both terminated financial support for the government, owing to growing concerns about fraud and corruption.

On December 24th 1999 Mr Bédié was overthrown in a bloodless coup. The coup was led by a group of young army mutineers headed by General Robert Gueï, who denied having political ambitions and promised new elections by the end of 2000. An all-party government was formed in January 2000, but intense competition and political manoeuvring soon led to an informal FPI-PDCI alliance against the RDR. RDR ministers were sacked from the cabinet in May 2000 and efforts were made to change the constitution to include an even more restrictive definition of the concept of "ivoirité", again aimed at preventing Mr Ouattara from standing as a presidential candidate. The constitution and electoral code were approved by 87% of voters in a referendum in late July. With presidential and legislative elections forthcoming, General Gueï announced his candidacy on behalf of the newly formed Union pour la démocratie et la paix en Côte d!Ivoire (UDPCI)"although he later stood as an independent candidate. He also proceeded to purge the army, in response to which many of his erstwhile military backers took refuge in neighbouring countries. A month later the Supreme Court disqualified all of the main presidential candidates except for General Gueï and Mr Gbagbo. The RDR and the PDCI boycotted the election in protest.

Henri Konan Bédié takes over

A coup installs General Robert Gueï

6 Côte d'Ivoire


General Gueï!s attempt to claim victory over Mr Gbagbo in what was obviously a rigged election was thwarted by a popular uprising on October 25th 2000. General Gueï was forced into hiding, after losing the support of the army. Mr Gbagbo was declared the winner, but this was immediately contested by Mr Ouattara!s supporters, who denounced the election as fundamentally flawed and took to the streets. Clashes between RDR militants on one side and the army and FPI supporters on the other turned particularly violent on October 26th. A mass grave of 57 people was later found in Yopougon, north of Abidjan, most of the victims being Muslims from the north, like Mr Ouattara.

Presidential election, October 2000 Votes % of totalLaurent Gbagbo (Front populaire ivoirien) 1,062,597 51.9Robert Gueï (independent) 587,267 28.7Francis Wodié (Parti ivoirien des travailleurs) 102,253 5.0Theodore Eg Mel (Union démocratique et citoyenne) 26,331 1.3Nicolas Dioulo (independent) 13,558 0.7Invalid ballot papers 254,012 12.4Total 2,046,018 100.0Registered voters - 5,475,143Voter turnout (%) - 37.4

Source: Comité national électoral.

Despite substantial misgivings, France and other influential partners eventually endorsed Mr Gbagbo!s election in the absence of a better alternative. In the legislative poll that followed in December, Mr Ouattara!s candidacy was rejected once again, prompting the RDR to boycott the contest. Unrest prevented voting from taking place in the north; by-elections were later held in January 2001, without the RDR. The PDCI won 98 seats in the legislative elections, narrowly followed by the FPI with 96 seats. In a new FPI-led government, Pascal Affi N!Guessan was appointed prime minister, but the PDCI, Parti ivoirien du travail (PIT) and some independents also took up some posts.

Legislative election results (seats)

Oct 1995 Dec 2000-Jan 2001Front populaire ivoirien (FPI) 13 96Parti démocratique de Côte d'Ivoire (PDCI) 149 98Parti ivoirien des travailleurs (PIT) 0 4

Mouvement des forces d'avenir (MFA) � 1Union démocratique et citoyenne (UDCY) � 1

Rassemblement démocratique des républicains (RDR) 13 5Independents 0 18Unallocated 0 2

Total 175 225Voter turnout (%) n/a 31.59

Source: Economist Intelligence Unit.

Developments in 2001 seemed to presage a reconciliation, starting with local elections on March 25th in which all of the political parties took part. Mr Bédié, Mr Ouattara and General Gueï agreed to participate in a forum of national reconciliation held in Abidjan between October and December 2001. The

Mr Gbagbo has adifficult mandate

Reconciliation seemed to be progressing well

Côte d'Ivoire 7


forum!s non-binding recommendations offered a consensual framework. It called on the judiciary to recognise Mr Ouattara!s nationality, and on all political parties to accept the results of the elections and the new constitution and to form a national unity government. It also recognised the need to overhaul the judiciary and the security forces and to reform land ownership, immigration and nationality policies. In January 2002, a meeting between Mr Gbagbo, Mr Bédié, General Gueï and Mr Ouattara appeared to cement the reconciliation. Mr Ouattara was awarded his nationality certificate and hopes increased that he would be recognised as an eligible candidate in the 2005 elections. A government of national unity, including the RDR, came into being in August 2002. However, the FPI still dominated the new government, retaining 21 seats in a cabinet expanded from 28 to 39 portfolios.

Recent political developments

The September 2002 coup attempt and the ensuing descent into civil war took the country entirely by surprise. On September 19th a military mutiny erupted in Abidjan, Bouaké (the second city) and the northern town of Korhogo, apparently led by junior officers. Several days of violence in Abidjan led to the assassination of General Gueï and of the interior minister, Emile Boga Doudou, as well as attempts on the life of Mr Ouattara and other leading political figures. The mutiny was put down in Abidjan amid repression and reprisals by pro-FPI gendarmes and vigilantes against immigrants, northerners and presumed RDR sympathisers. However, in Bouaké and Korhogo it took hold and was soon joined by rebellious officers who had been living in exile in Burkina Faso. As the mutineers swiftly took control of the entire northern half of the country, often welcomed by the local population, the military front hardened along an east-west line, splitting the country almost exactly in two. Fearing a prolonged civil war that could drag in other countries in the region, the French government stepped up its military presence in Côte d!Ivoire, agreeing to police the ceasefire line following the agreement of a truce on October 19th. After two new rebel groups, Mouvement pour la justice et la paix (MJP) and Mouvement populaire ivoirien du Grand-Ouest (MPIGO), opened a new front in the west of the country, the French contingent held the western rebels at a strategic crossroads and the government hurried to bolster the under-equipped army with emergency arms purchases, as well as hiring mercenaries.

Inconclusive peace negotiations at the end of 2002, under the auspices of the Economic Community of West African States (ECOWAS), hardened attitudes on all sides. The political climate worsened, with assassinations of presumed opposition sympathisers in Abidjan, atrocities carried out on civilians by both the government and rebels, and a refugee crisis in the west. In January 2003 the government, rebels and main political parties agreed to hold peace talks under French supervision at Marcoussis, a Paris suburb. The results were approved by a summit of African heads of state, the French president, Jacques Chirac, and the then UN secretary-general, Kofi Annan. Seydou Diarra, an elder statesman who was General Gueï!s prime minister, was selected to lead a reconciliation government that included the established political parties as well as the rebels. However, prospects for the implementation of the accord were quickly

A mutiny spirals into civil war

France breaks the stalemate after ECOWAS fails to do so

8 Côte d'Ivoire


undermined by resistance from Mr Gbagbo and controversy over the distribution of portfolios in the new government, requiring further negotiations to be held in Accra (Ghana), but the presidency sought to control opposition ministers by directly appointing their powerful permanent secretaries. Stand-offs also took place over crucial positions, including the defence and security portfolios and the appointment of new management for the state-owned television station.

The Marcoussis Accord

The meeting of the Ivorian political parties and rebel movements at Marcoussis took place under strict French supervision. To the surprise of many observers, the talks yielded a comprehensive accord substantially echoing the findings of the 2001 national reconciliation forum. The points of agreement included the following: • a national unity government should be formed, which would include all major parties and rebel groups at senior

ministerial level; • Laurent Gbagbo should remain president, but cede many executive powers to a new prime minister; • the rebels should lay down their weapons and the new government should organise the regrouping of all military

forces and their disarmament under international supervision; • the new government should reinforce the independence of the judiciary and restore public administration over the

entire national territory; • a Human Rights Commission should be established to investigate reported abuses; • the new government should propose a naturalisation law with clear criteria and a straightforward application process; • the constitution should be amended to limit presidential mandates to one term and to specify that candidates should

be Ivorian and born of one Ivorian parent; and • the government should prepare a law to reform existing landholding laws.

Lack of progress on key aspects of the Marcoussis Accord resulted in the government stumbling from crisis to crisis, with various parties suspending their participation in protest for months at a time while the disarmament and reform process stalled again. Meanwhile, the opposition hardened its unity against Mr Gbagbo as seven parties, namely the PDCI, the RDR, the UDPCI, Mouvement des forces d!avenir (MFA), Mouvement patriotique de Côte d!Ivoire (MPCI), the MPIGO and the MJP, formed a new coalition, known as the G7, with the objective of ensuring the full implementation of the Marcoussis and Accra Accords. In May 2004 Mr Gbagbo issued a decree firing three opposition ministers, resulting in the G7 ceasing dialogue and precipitating another round of mediation in Accra in late July, where the parties recommitted to the Marcoussis process. However, this too resulted in no material progress.

A major blow to the stumbling peace process took place in November 2004, when the national military, known as the Forces armées nationales de Côte d!Ivoire (FANCI), bombarded Bouaké, the headquarters of the New Forces. After a FANCI aircraft shot at a French post in Bouaké, killing eight French soldiers and a US civilian, France retaliated by bombing and disabling FANCI!s air capability. This set off four days of anti-French violence in Abidjan by "Young Patriot" militias, ransacking French businesses and residences, with no police intervention to contain them. French troops dispatched to the city fired shots into a crowd, killing several under disputed circumstances. These events resulted in a UN Security Council resolution imposing, on November 15th, an arms embargo on Côte d!Ivoire and providing for the imposition of individual sanctions on persons deemed to be hindering the peace process. Meanwhile,

The ceasefire is broken and an arms embargo is imposed

Côte d'Ivoire 9


Mr Gbagbo promised to ensure the passage of the constitutional amendment governing eligibility conditions. However, once parliament had passed the amendment, Mr Gbagbo reiterated his prior demand that it be approved by a national referendum before he could sign it into law. This manoeuvre renewed the stalemate, as the New Forces still required enactment of the amendment before beginning to disarm, while Mr Gbagbo argued that a referendum was constitutionally required and could not be held until the national territory was reunited, which presupposed the rebels having disarmed.

With international concern growing, mediation efforts were consolidated to the South African president, Thabo Mbeki, acting on behalf of the African Union (AU). Mr Mbeki convened a summit in Pretoria in April 2005, at which he personally brokered a new agreement. The main outcome was a decision that each party be able to present the candidate of their choice in the presidential election, by implication allowing Mr Ouattara to run. Mr Gbagbo was to take this measure under Article 48 of the Ivorian constitution, which allows extraordinary measures when the integrity of the territory is imperilled. After a delay Mr Gbagbo confirmed this measure, but also announced that he would use Article 48 for any other measure that he deemed necessary, sparking opposition protests that this deviated from the summit agreement. In May the opposition solidified its unity, as the PDCI and the RDR signed an alliance, the Rassemblement des Houphouëtistes pour la démocratie et la paix (RHDP).

Prospects for any further progress under the Pretoria agreement dimmed as an army campaign to begin disarming pro-government militias in the west fizzled out and a massacre of villagers in the west led to accusations of blame on all sides. After refusing to endorse Mr Gbagbo!s interpretation of events, the army spokesman, Colonel Jules Yao Yao, was demoted and went into hiding. With turmoil in the army and increased wariness by the rebels, the deadlock renewed, spurring another summit in Pretoria in late June 2005. This produced renewed statements of good intentions by all parties. By September, however, it became obvious that elections could not be held as scheduled. With Mr Mbeki having lost the trust of the opposition, the Nigerian president, Olusegun Obasanjo, joined the discussions in his capacity as head of ECOWAS. On recommendations from ECOWAS, the AU passed a resolution on October 6th, which the UN Security Council quickly endorsed on October 13th by issuing Resolution 1633. This provided for the extension of Mr Gbagbo!s mandate for up to one year until the holding of elections, and required the appointment of a new prime minister with extensive executive authority. An International Working Group (IWG) was also formed, to provide reinforced oversight of the peace process. In late November the governor of the BCEAO, Charles Konan Banny, was announced as prime minister. After lengthy negotiations Mr Banny formed a government in which he retained the strategic posts of finance and communications, entrusting them to junior ministers in his office, and distributed other posts among all parties.

After some initial teething problems in late February 2006, Mr Banny started to assert his political powers when he convened a meeting with Mr Gbagbo, Mr Ouattara, Mr Bédié and Guillaume Soro, the head of the New Forces, in the

Thabo Mbeki brokers a new peace summit

Start of disarmament fails and elections are postponed

Mr Banny holds meeting with four main crisis protagonists

10 Côte d'Ivoire


administrative capital, Yamoussoukro, marking the first time since the start of the crisis that such a summit had taken place without external mediation. In the ensuing period of goodwill Mr Banny began measures to address the problem of national identification and voter rolls, a necessary step towards the holding of elections. To resolve the impasse in which one side demanded voter identification before disarmament and the other the opposite, Mr Banny proposed a principle of "concomitance", by which both processes would begin at the same time on a trial basis. Despite resistance from Mr Gbagbo!s side, the idea was rapidly embraced by the IWG. Mr Gbagbo appeared to give in, accepting concomitance while reiterating his personal reservations, but he opened a new struggle in April by announcing that the Institut national de la statistique (INS), and not the election commission, should be in charge of establishing the new voter rolls, to immediate objections from the opposition.

In late May some real progress appeared to be under way, as public sessions known as audiences foraines were held in seven locations, scattered among government and New Forces territory and in the demilitarised zone, in which magistrates heard and adjudicated requests for identification documents. At the same time, preliminary "pre-regroupment" exercises were held in several locations as an initial step in the disarmament process, and military dialogue between FANCI and the New Forces started up again. However, this amounted to very little concrete progress toward disarmament, and the problem of disarming the militias remained intractable, particularly in the west, as evidenced by highly publicised ceremonies in various western towns yielding virtually no weapons turn-ins. In mid-July, with the identification process about to re-start on a broader basis, beginning in Abidjan and fanning out nationwide, the FPI sharpened its stand against the process, calling it a vehicle for election fraud. As the identification hearings began, "young patriot" militias once again demonstrated in Abidjan, shutting down the city for a day and leading to another round of political recrimination while effectively forcing the identification process to operate at snail!s pace.

In August, with the election deadline looming, Mr Gbagbo put forward a revised interpretation of the purpose of the identification hearings that would effectively result in leaving the 2000 voter rolls unaltered, a proposal immediately rejected by the opposition. In the face of this ambiguity the justice minister, a RDR member, recalled all operating identification teams, and Mr Banny sought a compromise. All of this was set aside, however, by an unexpected disaster, as it became clear, in early September, that a major cargo of toxic waste had been illegally dumped at various locations around Abidjan, causing widespread illness and several deaths. As it emerged that the waste had been unloaded from a tanker chartered by a Dutch firm, Trafigura, and brought ashore by an Ivorian contractor, Tommy SA, in a tangled arrangement involving possible corruption or dereliction of duty by numerous agencies and authorities, Mr Banny presented his government!s resignation. By the time the government had reformed, with its composition mainly unchanged, it was clear to all parties that holding elections by October was impossible.

Some progress appears to be under way

Government resigns over toxic waste scandal

Côte d'Ivoire 11


Facing this reality, the international community responded in a similar pattern as in 2005, with ECOWAS presenting recommendations to the AU and the UN Security Council then passing Resolution 1721 on November 1st 2006, which called for a further one-year extension of Mr Gbagbo!s mandate, along with an expansion of Mr Banny!s executive authority. It also made the UN commissioner for elections solely responsible for arbitrating disputes in the process of preparing the poll, now to be held by end-October 2007. The resolution failed to fully satisfy any party, however, as it mainly held existing arrangements in place, while Mr Gbagbo made no secret of his desire for an entirely new framework. Hardliners proposed that Mr Gbagbo appoint a new prime minister accountable to him and expel the French peacekeeping force. Meanwhile, Mr Gbagbo held consultations with representatives of all constituent forces in society, with the aim of launching a new initiative.

Following these consultations, Mr Gbagbo proposed, in December 2006, to hold bilateral talks with the New Forces, in a reversal of his previous refusal to accept the New Forces as a legitimate counterpart and in an apparent move to retake the initiative in the peace process and drive a wedge between the New Forces and their allies in the political opposition. A series of consultations ensued, resulting, in January 2007, in the G7 giving its approval to the idea, which was also gaining tentative approval from the international community on condition that it assist in the implementation of Resolution 1721. In early February the first round of "direct dialogue" was held in Ouagadougou (Burkina Faso) between a New Forces delegation and a group of emissaries of Mr Gbagbo. However, it was not clear what these discussions could achieve or what was their potential to re-start a political process that the IWG in January 2007 had declared to be in a state of total deadlock.

The Ivorian crisis: important recent events

September 2002-January 2003

A military mutiny is put down in Abidjan but spreads in the north. In October a ceasefire, enforced by France, divides the country into northern and southern halves. A peace accord is reached on January 25th in France. Seydou Diarra is appointed as the prime minister in charge of forming a government of national reconciliation.

January-July 2004

In March confrontation with police at an opposition march results in the death of at least 120 people. Parti démocratique de Côte d!Ivoire (PDCI) and six other opposition and rebel parties form a coalition, the G7. The president, Laurent Gbagbo, issues a decree firing three opposition ministers, including Guillaume Soro, the head of the rebels, known as the New Forces. All parties meet at an international summit in Accra, Ghana, and recommit themselves to the peace process.

November 2004

Government forces bombard Bouaké. The chief of staff, Mathias Doué, is sacked and replace by Colonel Philippe Mangou. The UN Security Council imposes an arms embargo and South African!s president, Thabo Mbeki, is chosen to mediate the crisis.

Mr Gbagbo proposes a direct dialogue with the New Forces

UN extends the transition period again

Control of the countryMALI

GHANA

GUINEA

LIBERIA

YAMOUSSOUKRO

Abidjan

Man

"Confidence zone"

New Forces territory

Korhogo

0 km 200 400

12 Côte d'Ivoire


April-June 2005

Mr Gbagbo agrees to use emergency powers to allow all parties to field presidential candidates, thus permitting Alassane Ouattara, the leader of Rassemblement démocratique des républicains (RDR), to run. The PDCI and the RDR form an alliance, Rassemblement des Houphouëtistes pour la démocratie et la paix (RHDP). Disarmament deadlines lapse.

July-August 2005

From hiding, Colonel Jules Yao Yao (demoted in June 2005) and General Doué call on soldiers to resist Mr Gbagbo!s orders. Parliament again fails to pass agreed reform laws within the most recent timetable. The opposition disavows Mr Mbeki.

September-December 2005

Mr Gbagbo officially postpones elections. The UN Security Council endorses African Union emergency measures for Côte d!Ivoire through the issuance of Resolution 1633, which includes the extension of Mr Gbagbo!s mandate for up to one year. The governor of the regional central bank, Charles Konan Banny, is eventually designated as prime minister. Mr Banny announces a power-sharing government in which he keeps the finance and communications portfolios in the prime minister!s office.

January-February 2006

The International Working Group (IWG) recommends the dissolution of parliament, sparking a crisis in which the president!s Front populaire ivoirien (FPI) announces that it is pulling out of the peace process. Following mediation by the Nigerian president, Olusegun Obasanjo, the FPI returns to the government. Mr Gbagbo issues a decree prolonging the National Assembly!s mandate. UN financial and travel sanctions are imposed on three protagonists in the conflict, including the leader of the "young patriots", Charles Blé Goudé. Mr Banny holds a summit of political leaders in the administrative capital, Yamoussoukro.

April-May 2006

The principle of "concomitance" is agreed, whereby identification exercises necessary to rebuild voter rolls will begin on a trial basis alongside first steps towards disarmament. The trial is held in seven localities and is considered a success.

July-August 2006

The FPI rejects the identification process, and "young patriots" demonstrate in Abidjan. Mr Gbagbo proposes to limit the mission of the identification hearings, resulting in opposition protest and the suspension of the hearings.

September 2006

The government resigns, following an illegal toxic waste scandal, and is reinstated.

October-November 2006

Elections are postponed again, and the international community brokers a new one-year transition for Côte d!Ivoire. UN Security Council Resolution 1721 largely renews the prevailing arrangement, with elections to be held by October 2007.

December 2006-February 2007

Mr Gbagbo proposes direct negotiations between the presidential camp and the New Forces. After consultation with the political opposition, the New Forces agree to

Côte d'Ivoire 13


join the negotiations. A New Forces delegation and emissaries of Mr Gbagbo meet in Ouagadougou (Burkina Faso) but no concrete progress is reported.

Constitution, institutions and administration

Côte d!Ivoire!s first constitutional regime, which was adopted at independence in 1960, was still in place when the December 1999 coup took place. However, many amendments had been made to the 1960 constitution. The country adopted a multiparty system in 1990 in response to growing domestic and international pressure. Mr Bédié also changed the constitution twice, in a bid to reinforce his power base. It was his amendment of the electoral code in 1995 that started the debate over the concept of ivoirité. The new constitution was approved by referendum, with 87% of the vote in July 2000, but it remained deeply controversial because of the last-minute revision of the eligibility rules (Article 35). The 2001 forum of national reconciliation recommended that the constitution be reviewed and clarified. This process has been overtaken by events, first by the Marcoussis/Accra agenda, which requires significant changes to the constitution, and second by the continuation of the political and military conflict, which has cast that agenda into uncertainty. Since October 2005 the country has been in an ambiguous constitutional situation whereby neither the two successive one-year extensions of Mr Gbagbo!s term nor the delegation of executive powers to the prime minister are provided for in the constitution, yet the constitution has not been suspended.

Article 35, the concept of ivoirité and the civil war

The 1995 electoral code barred Alassane Ouattara from standing in the presidential election on the grounds that he could not prove that both his parents were of Ivorian descent. The code was amended in 1998, requiring that a presidential candidate should have one Ivorian parent and be able to demonstrate ten years of continuous residence. The eligibility criteria as set out in Article 35 of the new constitution were tightened shortly before the referendum took place in 2000, requiring presidential candidates to prove that they had never held any other nationality and that both of their parents were Ivorian citizens. Mr Ouattara was a student, and later held posts in international organisations, allegedly as a Burkinabé citizen. During the forum of national reconciliation in 2001, the president, Laurent Gbagbo, went so far as to admit that the two clauses had been specifically designed to exclude Mr Ouattara. Mr Ouattara!s case polarised the country, some people claiming that his exclusion was based on fair constitutional rules and others insisting that he had been denied fundamental civic and political rights. This was symptomatic of the country!s deepening identity crisis. The nationalistic concept of ivoirité, developed during the rule of Henri Konan Bédié and used later as a political platform by both General Robert Gueï and Mr Gbagbo, claimed that Ivorian citizenship should be restricted and protected from the influx of foreign immigrants. It is estimated that up to one-third of the total population consists of first- and second-generation immigrants, chiefly of Burkinabè, Malian, Guinean and Ghanaian origin. Labour was imported from surrounding countries as far back as the colonial period, and the numbers swelled during the boom years of the 1970s. Migrants came principally as seasonal workers on plantations, but large numbers subsequently settled in towns. Fuelled by politicians, the concept of ivoirité encouraged southerners, who are, in the

The constitution is changed

14 Côte d'Ivoire


main, Christian or animist, to regard themselves as "true Ivorians", and whipped up xenophobic sentiments against Muslim northerners (whether they were of Ivorian nationality or not). Although a settlement of the controversy over Mr Ouattara seemed to be in progress before the civil war erupted, the swift division of the country into rebel north and loyalist south confirmed that the concept of ivoirité had the potency to overwhelm and reframe other issues. The Marcoussis/Accra accords envision addressing ivoirité on several fronts, namely eligibility, immigration and citizenship policy, and underlying land-ownership issues. The lack of progress in implementing the accords testifies to the deep-seatedness of this dispute. Paradoxically, the question of ivoirité has faded from public debate, as the civil war itself and the commitment or otherwise of the different parties to the peace process have become the primary issues. In addition, in April 2005 Mr Gbagbo agreed to use exceptional powers to allow all parties to present the candidate of their choice"thereby including Mr Ouattara"in the October 2005 election. Although that election did not take place, it seems likely that this precedent will hold. However, the underlying problem of ivoirité has yet to be resolved and has the potential to resurface in the context of the resolution of issues of nationality, identification and voter rolls necessary to hold a credible election, underscoring the complexity of the crisis.

The present constitution is still based on a strong presidential regime. The president is elected by universal suffrage for a five-year term of office, which is renewable once. The president appoints a prime minister to co-ordinate the government. Members of the unicameral parliament, the National Assembly, are also elected by universal suffrage every five years. The number of parliamentary seats has been increased from 175 to 225. A Constitutional Council handles matters of constitutional interpretation. The constitution also provides for an economic and social council and guarantees the independence of the judiciary. In practice, the courts have remained strongly influenced by the executive. Prior to the civil war, a series of major judicial reforms were announced but had yet to be implemented. These included installing a Council of State, a Supreme Court of Appeal and an Audit Office to replace the now redundant Supreme Court and its judiciary and audit chambers.

Heavy red tape pervades public administration, making it sometimes slow and inefficient. Financial malpractice plagued previous administrations, encouraged by the absence of auditing. Numerous cases of embezzlement by members of the Bédié government were divulged after the 1999 coup. Mr Gbagbo!s admin-istration has been implicated in a number of new scandals, including the award of public funds to support ventures by obscure or unknown local and foreign companies, along with opaque privatisation deals. There are widespread concerns that cocoa-sector revenue that should be being used for price stabilis-ation and sector development is being diverted into off-budget expenditure, notably military spending. The severe economic downturn since the conflict erupted in 2002 seems to have led to higher levels of generalised corruption and venality at all levels of public administration. Up to this point the government has managed to pay the civil-service wage bill, but with frequent delays, and civil-service unions in various fields, including the public health system, have launched periodic, though usually brief, protests and strikes.

A powerful presidency

Public administration is plagued by problems

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During the height of the military conflict in 2002 and early 2003 public administration was affected by the curfew that curtailed the workday in Abidjan. Government offices in the north and west of the country shut down, and with few exceptions have yet to reopen, pending the oft-delayed implementation of the disarmament agreement. The New Forces have established a makeshift administration that levies fees on transport and trade and maintains public safety. Many public services, such as schools and clinics, have not shut down altogether but are run with minimal staff and on an improvised basis. Delegations from the central ministries in Abidjan have visited many locations, but so far only a few civil servants have been deployed.

Political forces

Founded in 1982 by the current president, Mr Gbagbo, the nominally socialist FPI historically claimed to have offered the only genuine alternative to four decades of PDCI rule, since the party was already in opposition when the first multiparty elections took place in 1990. After Mr Gbagbo!s victory in 2000, the FPI increased its parliamentary representation from 13 seats to 96. It led the government and held the significant ministries from 2000 until the formation of the national reconciliation government in March 2003. The prime minister during that period, Affi N!Guessan, represented the FPI in the Marcoussis peace talks, and he remains the party president. The FPI!s traditional support base is in the Bété-dominated centre-west around the cities of Daloa and Gagnoa. Support in Abidjan is also significant, particularly in the vast, populous suburb of Yopougon.

In the new government of Mr Banny, the FPI holds seven ministries, compared with nine in the 2003-05 government of Mr Diarra. However, the influential hardline faction of the FPI operates less out of the ministries than through Mr Gbagbo!s presidential advisers. Leaders of the hardline group include Mr Gbagbo!s wife, Simone Ehivet Gbagbo, who is also the party!s leader in parliament; Mamadou Koulibaly, the president of the National Assembly; and the "prophet", Moïse Koré, pastor to Mr and Mrs Gbagbo, who are both "born again" evangelical Christians. This group appears to have consolidated its sway over the FPI and has demonstrated its overtly good relations with the "young patriot" militias.

Founded in 1946 by the late president, Mr Houphouët-Boigny, the PDCI-RDA, known as the PDCI, held office from 1960 to 1999. It remained the only legal party until 1990, when the first multiparty elections took place. The number of PDCI seats has now fallen from a comfortable majority of 146 in 1995 to a still substantial 98. Ousted by the December 1999 coup, the party has nonetheless managed to maintain a solid base of support in the Akan-dominated central and eastern regions, particularly around Yamoussoukro and Bouaké. The PDCI!s historic strength, notably in the north and the far west, has been supplanted in recent years by the RDR and the UDPCI respectively.

The PDCI underwent an internal power struggle after losing incumbency. After Mr Bédié returned from France to participate in the 2001 forum of national reconciliation he won an internal election and resumed the presidency of the

The FPI is sharing power butcontrols back channels

The PDCI seeks a revival

16 Côte d'Ivoire


party in 2002. Despite rivalries within the party, Mr Bédié appears to have successfully restored his pre-eminence within the party. The PDCI accepted posts in Mr Gbagbo!s 2001-03 government but has taken pains to differentiate itself from FPI policies as the civil war has continued. Its alliance with the RDR under the RHDP label has consolidated the single most important alliance within the G7 coalition of opposition parties and New Forces, lending the PDCI a strategic role at the political centre of the coalition.

The RDR was formed in June 1994 by dissidents from the ruling PDCI who remained loyal to Mr Ouattara. A liberal opposition party, the RDR draws its main support from the north, Mr Ouattara!s home region. A former deputy managing director of the IMF, Mr Ouattara has also enjoyed significant international support. The RDR!s boycott of the 2000 legislative election placed it largely outside the formal constitutional arena; subsequent by-elections garnered the party a mere five seats. However, it came first in the March 2001 local elections, leading in the north and also in urban districts in several other regions.

The RDR entered Mr Gbagbo!s government of national unity a month before the civil war, and the outbreak of the war and the spread of rebellion in the north"the party!s base"appeared to take it by surprise. The state media accused the RDR of fomenting the rebellion, however, and the party leadership went into hiding or exile to avoid detention. After the Marcoussis agreement the party joined the national reconciliation government with seven ministers, although their effective power was highly curtailed in practice. The formation of the G7, and later of the RHDP, has consolidated the RDR!s position as a crucial political presence, however. In the new government of Mr Banny the RDR holds five portfolios. Mr Ouattara, who has now been recognised as an eligible presidential candidate, returned in January 2006 from prolonged self-imposed exile in France, reasserting his position in the Ivorian political scene despite fears for his security.

One result of the civil war is the emergence and conversion to politics of armed movements, now known collectively as the New Forces. The main rebel group, the MPCI, assumed its political identity several weeks into the war, with the former student leader, Guillaume Soro, as secretary-general. As a result of its military gains, the MPCI obtained seven seats in the first reconciliation govern-ment and has six in the new government. The New Forces have six posts, and Mr Soro is minister in charge of the reconstruction of the north. Although they have not made the formal transition to political party, the New Forces have assumed a hybrid role as members of an alliance of political parties yet at the same time the de facto government of the country!s northern half.

The MPCI!s backers and sources of funding, which have allowed it to run an organised and relatively disciplined military campaign, are still largely mysterious and the source of much speculation, with supporters of Mr Gbagbo alleging that the MPCI is nothing more than the "military wing" of the RDR and is funded by Mr Ouattara. In fact, little is known other than that the New Forces currently fund themselves, at least in part, by levying duties on the entry and transport of goods within their zone, as well as from both licit and illicit trade

The RDR has become a key political actor

The former rebels are not an official political party

Côte d'Ivoire 17


across the border to Burkina Faso and Mali. The other two rebel groups, the MJP and the MPIGO, are confined to the west and are smaller, less well organised and less popular than the MPCI.

A number of militias and youth activist groups have emerged since the start of the war under the broad designation of "young patriots". Most prominent among them is the Groupement patriotique pour la paix (GPP). These organisations are led by former student activists and typically gather young men from the vast pool of under-employed urban youth in Abidjan. The "young patriots" have served as a de facto militant wing for Mr Gbagbo!s hardline supporters, and have fomented strikes and demonstrations, including violent attacks against French business interests, immigrants and suspected opposition sympathisers. The actual number of organised "young patriot" militants is considered to be quite small; however, they have proved to be capable of shutting down economic activity in Abidjan, as they are allowed to act with impunity. The most visible "young patriot" leader, the so-called General, Charles Blé Goudé, enjoys unfettered access to the presidency and is considered to be close to Mr Gbagbo!s wife. Other "young patriot" leaders include Eugène Djué and Jean-Yves Didopieu. The most-organised groups, such as the GPP, constitute de facto militias and are armed. They have argued that they must be considered in the disarmament process and compensated for laying down their weapons. Complementing the "young patriot" movements based in Abidjan are other armed groups that have been formed principally in the centre-west of the country around Gagnoa, where the FPI and Mr Gbagbo!s ethnic group, the Bété, are dominant. These militias have established numerous roadblocks in the region and have also clashed with peacekeeping forces stationed along the western portion of the ceasefire line.

Main political figures

Laurent Gbagbo

The current president was a long-standing opposition politician before winning the presidency in October 2000. He is a Bété from the centre-west and draws much support from there. The civil war represented a defeat for Mr Gbagbo but since then he has manoeuvred skilfully to maintain his power. In fact, Mr Gbagbo remains the most influential figure in the political arena, much to the frustration of his rivals. Mr Gbagbo!s wife, Simone Ehivet Gbagbo, is considered to be one of the leaders of the hardline faction in his party.

Charles Konan Banny

The former governor of the regional central bank, Banque centrale des Etats de l!Afrique de l!ouest (BCEAO), Mr Banny emerged in November 2005 as the only figure with sufficient political weight and international recognition to qualify as a prime minister with extended executive powers acceptable to all sides. This stems in part from Mr Banny having been in post in Dakar, Senegal for the duration of the crisis, and also from his extensive political network on all sides of the conflict. A member of the Parti démocratique de Côte d!Ivoire (PDCI), Mr Banny is related to the family of a former president, Félix Houphouët-Boigny. Although he has long been considered to be a possible presidential candidate, he is technically ruled out from standing in the next election as a condition of his post as interim prime minister.

The "young patriots"

18 Côte d'Ivoire


Henri Konan Bédié

Côte d!Ivoire!s president from 1993 until his ousting in 1999, and president of the PDCI, Mr Bédié fled to France in self-imposed exile in 1999, before returning to the country in time for the forum of national reconciliation in late 2001. Although his time in office was widely seen as having been marred by corruption, he is expected to run in the next presidential election.

Alassane Dramane Ouattara

An international economist, central banker and PDCI prime minister (1990-93), Mr Ouattara became leader of the opposition Rassemblement démocratique des républicains (RDR) in 1999. He was excluded from the 1995 and 1999 presidential elections after his nationality was questioned. He subsequently lived in exile but returned to Côte d!Ivoire in January 2006. More of a technocrat than a politician, Mr Ouattara is a chief contender for the presidency now that his eligibility has apparently been established. Mr Ouattara is a Muslim and a native of Kong in the north.

Guillaume Kigbafori Soro

Secretary-general of the Mouvement patriotique de Côte d!Ivoire (MPCI) and a former student union leader, Mr Soro emerged as the political spokesman of the rebellion in October 2002. A Christian from the north, Mr Soro is articulate and a rising star, but he has made enemies owing to his identification with armed rebellion. He appears to have overcome dissent within the New Forces from elements loyal to the rebellion!s purported instigator, an exiled military officer, Ibrahim Coulibaly.

Charles Blé Goudé

The most influential leader of the "young patriot" organisations that have sprung up as a hardline militia for Mr Gbagbo. A former student union leader, like Mr Soro, Mr Blé Goudé"known to his supporters as "the General""enjoys unfettered access to the presidency and is famous for his incendiary rhetoric, which has extended to threats against opposition supporters, the media and French businesses. Since February 2006 he has been under UN sanctions (a travel ban and a freeze on his financial assets).

International relations and defence

Whereas General Gueï!s attempt to remain in power undemocratically was strongly condemned, Mr Gbagbo!s claim to victory in the 2000 presidential election at first received a mixed reception. The Organisation of African Unity, the UN, South Africa and the US all supported Mr Ouattara!s cause strongly, describing the polls as fundamentally flawed and calling for a new election. Only France, perhaps influenced by ties between its then ruling Socialist party and that of Mr Gbagbo, accepted his victory. The EU and the US further tightened their stance after the Supreme Court rejected Mr Ouattara!s candidacy for the legislative election. The smooth execution of the local elections in March 2001 and the holding of the national reconciliation forum in December 2001 helped to enhance the legitimacy of the president. Subsequently, most multilateral and bilateral donors pledged to renew their co-operation with Côte d!Ivoire. However, the outbreak of the crisis in September 2002 resulted in the

Foreign ties had been improving

Côte d'Ivoire 19


suspension of external aid flows pending a political breakthrough, with the exception of some limited humanitarian programmes.

Mr Gbagbo!s government had more trouble building trust with its neighbours. The Ivorian president!s apparent endorsement of the nationalist ivoirité ideology worried leaders of the many countries with large immigrant communities in Côte d!Ivoire. Tension has been highest with Burkina Faso, which the government and FPI leaders have regularly accused of meddling in Ivorian affairs. The apparent ties between the MPCI and Burkina Faso, which sheltered some of the rebellious officers, and which the movement used as a sort of rear base, exacerbated the tensions between the two governments. Mr Gbagbo!s government considered the rebellion to be a foreign invasion. Côte d!Ivoire!s large population of Burkinabè origin, numbering at least 2m, found itself at risk of reprisals, along with immigrants from other Muslim countries such as Mali and Niger, and tens of thousands left the country during the war, often in precarious circumstances. The designation of Burkina Faso!s president, Blaise Compaoré, as the mediator of the "direct dialogue" between Mr Gbagbo and the New Forces could, however, signal a rapprochement in relations between the two countries.

When the new crisis emerged in 2002, initial regional attempts to mediate suffered from political rivalry, lack of resources and leverage, and the intransigence of the Ivorian parties. It took an aggressive mediation effort and the deployment of troops by France"breaking with its more hands-off approach to Africa of the past several years"to force the parties to negotiate. After the violent events of November 2004 the response of the regional and international community grew increasingly unified. ECOWAS and the AU, as well as influential leaders such as the Nigerian president, Mr Obasanjo, strongly supported the UN Security Council resolution proposed by France that imposed sanctions on Côte d!Ivoire. Under this resolution the sale of arms to Côte d!Ivoire is banned, and the Security Council drew up a list of persons who could be have financial sanctions and travel bans imposed on them"so far these sanctions have been imposed on only three protagonists in the conflict, including the leader of the "young patriots", Mr Blé Goudé, in February 2006. Subsequently, the South African president, Thabo Mbeki, led the international mediation until August 2005, when the opposition and New Forces repudiated him, finding him to be biased toward Mr Gbagbo. The involvement of Mr Obasanjo rescued the mediation, and Security Council Resolution 1633 was subsequently passed, extending Mr Gbagbo!s mandate in October 2005. The current principal mediator is the Congolese president, Denis Sassou Nguesso. However the renewed impasse is likely to prompt new initiatives, such as the role recently taken by Mr Compaoré in hosting the "direct dialogue" between the New Forces and Mr Gbagbo!s emissaries.

Nevertheless, the swift passage of two successive UN resolutions, in 2005 and 2006, attests to the cohesiveness of the international response at this stage in the crisis and suggests that the political crisis will remain internationalised for some time to come. The centrepiece of these efforts is the UN-mandated peacekeeping force, which has assumed an increasingly crucial role with the

Regional and international stance is unanimous

Peacekeeping forces will remain in Côte d'Ivoire

The civil war draws in the whole region

20 Côte d'Ivoire


lapse of the scheduled date for elections. Since late 2002 a French force, known as Opération Licorne, and a West African force initially known as Ecoforce have, in tandem, controlled the ceasefire line and maintained a liaison presence in Abidjan, Yamoussoukro and Bouaké. In January 2004 small French detachments began to deploy to cities in the north, such as Korhogo and Ferkéssédougou, with the co-operation of the New Forces, to help to secure the main north-south commercial axis. In February 2004 a "blue helmet" force of 6,240 was agreed and placed under the command of a Senegalese general. Under a Security Council resolution passed in April 2004, this force, known as Opération des Nations Unies en Côte d!Ivoire (ONUCI), shares the UN peacekeeping mandate with the French Licorne force, although the French force operates autonomously and under its own command. This arrangement reflects the fact that the French force was already present on the ground, as well as its crucial role. The ONUCI mandate has been renewed periodically without major difficulty, and currently extends to June 30th 2007.

Relations with France have long been a crucial component of Ivorian international relations"the former colonial power remains the main trading partner, foreign investor and bilateral donor"but are now more fraught than at any time in the past. The French community in Côte d!Ivoire, although smaller than in the past, represented about 16,000 people in 2003, and French-owned businesses account for up to 54% of the country!s tax base. However, France!s successful brokering of the Marcoussis peace accord led to resentment among hardliners and violent demonstrations against French businesses in January 2003. The uneasy relations worsened again in October 2003, when a French state radio journalist, Jean Hélène, was killed by an Ivorian police officer.

Although relations improved sufficiently to permit a state visit to France by Mr Gbagbo in February 2004, the events of November 2004"including the deaths of French soldiers under Ivorian air attack and the anti-French assaults and vandalism that followed the French response"were deeply troubling for French public opinion, and did much to erode what remaining credibility Mr Gbagbo enjoyed in Paris, particularly among some of his long-time friends in the French socialist party. The widely televised images of French and dual nationals encamped at the French military base in Abidjan and being evacuated by special flights suggest that Franco-Ivorian relations have taken on a new hue. The French community in Côte d!Ivoire is estimated to have shrunk to around 8,000 after November 2004, with the closure of several French-owned businesses. At the same time, it is virtually certain that France will retain a major role in Côte d!Ivoire, owing to the 1960 treaty binding the two countries, the presence of a permanent military base, and the role played by major French firms in energy and infrastructure.

Historically, the Ivorian government has invested less in the army than in the police, particularly the gendarmerie, as it was traditionally more concerned with domestic law and order than with external threats. The relative weakness of the army was underscored by the ease with which the rebellion spread across the northern half of the country. Since then Mr Gbagbo has made efforts to bolster military capacity, although he has been hampered by the precarious

Relations with France are a crucial component

The military needs re-integration and reinvestment

Côte d'Ivoire 21


state of the public finances. There is evidence that during 2003 the government spent considerable sums off-budget to equip and train the army; it is thought to have purchased arms from Eastern European sources and to have paid for a continued presence of mercenaries. In addition, a campaign was conducted to induct new recruits into the army, many of whom were drawn from the pool of underemployed youth that has also gravitated to the "patriot" militias. It is understood that the army has become increasingly divided by ethnicity, with members of Mr Gbagbo!s Bété and allied groups assuming more operational responsibilities while northerners in particular and officers suspected of opposition sympathies in general have been relegated to non-essential roles.

In November 2004, soon after the confrontation with France, the army chief of staff, General Mathias Doué, was relieved of his post under circumstances that remain unclear and replaced by a noted hardliner who had led the aborted assault on Bouaké, Colonel (now General) Philippe Mangou. In June 2005 the army spokesman, Colonel Jules Yao Yao, was demoted for disagreeing with the official interpretation of the May 31st massacre in the west; in August both Colonel Yao Yao and General Doué issued declarations from hiding denouncing Mr Gbagbo!s rule. Other senior officers have been marginalised and in some cases brutalised.

Most of the military leadership of the New Forces are themselves career Ivorian army officers, and relations between the military personnel on either side of the ceasefire line have often been more cordial than those between the political leaders. Faced with the continuing partition of the country, the New Forces have formalised their hierarchy in an attempt to evolve from de facto warlordism to a coherent system of zone commanders. A "military council", established in March 2004, is to serve as an overall military and political command. The challenge of reintegrating the national army is likely to become more difficult the longer a political settlement is delayed.

Military personnel, mid-2005 Armed forces 8,100 Army 6,500 Navy 900 Air force 700

Paramilitary 8,950 Presidential guard 1,350 Gendarmerie 7,600

Total regular armed forces 17,050Militia 1,500Reserves 10,000

French forces 3,800UN forces 6,112

Source: International Institute for Strategic Studies, The Military Balance 2005/06.

Security risk in Côte d'Ivoire

Armed conflict

Côte d!Ivoire!s reputation as a haven of political order in West Africa has been severely undermined since the military coup of December 1999. The risk of renewed

22 Côte d'Ivoire


armed conflict is significant, as made clear by periodic skirmishes and the assault on Bouaké by government forces in November 2004. However, the fact that the assault was ultimately rebuffed confirms that a resumption of all-out war is unlikely, owing to the presence of French and UN peacekeepers who have shown their readiness to engage. Since the passage of UN Security Council sanctions, international scrutiny of the Ivorian situation has increased and the margin of manoeuvre available to the parties has narrowed. Supporters of the president, Laurent Gbagbo have, in particular, periodically given signs that they consider the military option to be an acceptable exit strategy, and this view has adherents among the New Forces as well. However, the prolonged impasse has created vested interests on both sides, who have found ways to profit from the status quo and therefore benefit from its continuation. The most fragile area remains the west of the country, where the civil war took the heaviest toll and where both sides exploited local ethnic animosities and made use of Liberian irregulars. Skirmishes with peacekeepers are most frequent in this region, as are acts of interethnic violence and intimidation that are linked to the overall conflict by the presence and arming of various ethnic militias.

Political unrest

The risk of political unrest remains high so long as elections are not held and a durable political solution to the conflict is not achieved. Moreover, the more it appears that elections are unlikely to be held by the new deadline of October 2007, the more volatile the political situation may become. A feature of the current political crisis since September 2002 has been the use of "young patriots". Associated with hardliners in the Front populaire ivoirien (FPI; the party of the president), the "young patriots" have been given free rein to riot, destroy property and threaten foreigners, particularly the French and the UN representatives. Owing to the continued existence of the "young patriots", against a background of xenophobia and ethnic polarisation, the risk of ethnic or religious clashes also remains high. In fact, the climate has deteriorated to such an extent that some demonstrators are proud to call themselves xenophobes. So far, the presumed "foreigners" have been measured in their response, but the situation, particularly in Abidjan!s poorer sections, will remain volatile. In addition, clashes over land use have spread across the farm belt in recent years and may continue in the face of attempts to reform landholding law and in the prevailing climate of xenophobia. Finally, conditions in the north are inherently volatile owing to the partial organisation of the New Forces, but there have been few, if any, reports of major political unrest aimed at the New Forces in these regions.

Violent and organised crime

Crime in Côte d!Ivoire has surged and become more violent since the coup of December 1999. Light weapons were abundant before the civil war and will be even more so now. Armed gangs in the west have abused civilians under cover of the civil war, and there have been many reports of atrocities such as rape and mass murder. In Abidjan, where carjacking and other violent crime were already prevalent before the war, expatriates have been targeted by pro-Gbagbo groups for abuse and looting, with the French bearing the brunt of the attacks. These have included physical assaults such as beatings, as well as alleged rape. Non-French expatriates have generally escaped the worst incidents, but the fostering of xenophobia for political purposes renders the situation inherently volatile.

Côte d'Ivoire 23


Resources and infrastructure

Population

There are around 69 different ethnic groups in Côte d!Ivoire. The four main groups"Akan, Kru, Mandé and Voltaic"include several sub-groups. The Akan include the Abron, Baoulé and Agni; the largest Kru population is the Bété; the Mandé include the Malinké, Dioula, Yacouba and Gouro; and the Voltaic include the Senoufo. The influx from largely Muslim northern countries has changed the country!s religious composition over the years, and Muslims are now estimated to be the country!s largest religious group, accounting for about 40% of the population. According to the most recent population census, the immigrant population totalled 3m in 1998, about 26% of the total population. Most of them are from other African countries, particularly Burkina Faso, Ghana, Guinea, Mali and Liberia. The French community has dramatically shrunk since 2002, and particularly after the clashes and violent anti-French demonstrations of November 2004. There is also a substantial Lebanese community engaged mainly in trade.

Côte d!Ivoire!s population profile is that of a young country"over 42% of the population was under 15 years old in 2004. According to IMF estimates, the country!s population was 18.2m in 2005. Population growth dropped significantly, from 4% in the 1970s to less than 2% in the late 1990s, as a result of falling fertility rates, lower immigration and, more recently, the effects of AIDS. As none of these factors looks likely to abate in the coming years, the UN expects the rate of population growth to fall to just 1.7% between now and 2015. Population density is moderate, with an estimated 46 inhabitants per square kilometre in 1999, compared with 133 per square kilometre in Nigeria and 81 per square kilometre in Ghana. There is pressure on land, however, and clashes over land ownership have become more frequent over the years in the cocoa region, notably where cocoa workers of foreign origin have accessed land ownership. In addition, Côte d!Ivoire has become one of the most urbanised countries in West Africa; an estimated 44.6% of all Ivorians live in towns. Abidjan!s population was officially estimated at 2.9m in the 1998 population census but is probably much higher given the city!s urban sprawl. It has also grown considerably since the civil war in 2002, owing to the mass arrival of people displaced from rebel-held areas. It is estimated to have reached almost 4m in recent years.

In its 2006 Human Development Report the UN Development Programme (UNDP) ranked Côte d!Ivoire 164th out of 177 countries in terms of human development. Real GDP per head (on a purchasing power parity basis) was US$1,551 in 2004, according to the UNDP. Although this is a high level for the region, poverty is still a problem. The 1994 devaluation of the CFA franc benefited rural areas, but the purchasing power of urban dwellers, particularly civil servants, was significantly curtailed, and the proportion of poor house-holds in Abidjan increased from 4.8% in 1993 to 20.1% in 1995. Low inflation and strong economic recovery from 1995 helped to boost income per head until

A multi-ethnic population

A poor quality of life for the majority

Demographic pressures

24 Côte d'Ivoire


1999-2002, when political instability undermined the economy, leading to a decline in real GDP in 2000-02. According to the UN, 48.8% of the population lived under the US$2 poverty line and 14.8% under the US$1 poverty line in 2004. Social services have also deteriorated owing to a lack of funding, which is confirmed by the latest UNDP indices for education and life expectancy. According to the UNDP, in 2004 only 48.7% of Ivorians were literate (60.8% of men and 38.6% of women), compared with 57.9% of Ghanaians (66.4% of men and 49.8% of women). Similarly, life expectancy is considerably below that for Ghana, at only 45.9 years in Côte d!Ivoire compared with 57 years in Ghana.

Comparative human development indicators (2005 unless otherwise indicated)

Côte

d'Ivoire Mali Burkina

Faso Nigeria GhanaHuman Development Index 0.4 0.3 0.3 0.4 0.5

Real GDP per head (US$; in PPP terms) 1,551 998 1,169 1,154 2,240Life expectancy at birth (years) 45.9 48.1 47.9 43.4 57.0Adult literacy rate (%) 48.7 19.0 21.8 n/a 57.9

Combined primary, secondary & tertiary education gross enrolment ratio (%) 40 35 26 55 47

Adults living with HIV/AIDSa (%) 7.1 1.7 2.0 3.9 2.3Population below poverty lineb (%) 14.8 72.3 27.2 70.8 44.8

a Ages 15-49 (2005). b The poverty line is defined as an income of US$1 per head (1990-2004).

Source: UN Development Programme, Human Development Report, 2006.

The government has committed itself to poverty alleviation, but this has been undermined by political instability and the outbreak of civil war in 2002. The government was expected to produce a poverty reduction strategy paper (PRSP) in 2002, following consultation with local non-governmental organisations and civil society, as part of the IMF-World Bank!s heavily indebted poor countries (HIPC) debt-relief initiative. However, given the continued crisis and the delays in the post-war reconstruction effort, this initiative is unlikely to restart before elections are held.

Education

At a time of mounting fiscal difficulty in the late 1990s, the government of Henri Konan Bédié was reluctant to sanction additional spending on education, despite funding from the World Bank. According to the UNDP, the net enrolment ratio (as a percentage of the relevant age group) for primary schools in 1997 was 58.3%, dropping to 34.1% for secondary schools. In 2004 net primary school enrolment was 56%, but only 20% for secondary schools. Classes are overcrowded and the quality of teaching has deteriorated over the years, leading to low completion and pass rates. The impact of HIV/AIDS on the education system is alarming. According to a study conducted by UNAIDS and the UN Children!s Fund (UNICEF), 70% of teachers! deaths in 1997 and 1998 were the result of the disease. This means that of around 1.7m primary school students, 23,000 could have lost a teacher to AIDS in 1999. In addition, sick leave has increased sharply, resulting in many lost man hours in the country!s education sector. Plans to improve the national education system through the

The education system is in crisis

Côte d'Ivoire 25


construction of a series of new schools in 2002 have been put on hold owing to the conflict. The civil war worsened this situation, especially in the north where many schools were closed for several months and have since only partially reopened and rely in part on volunteer teachers.

Health

Healthcare provision is limited. According to the UN, the probability of not surviving to age 40 at birth was 42.3% in 2000-05, compared with 27.7% in neighbouring Ghana. The UNDP estimates that there were only 12 physicians per 100,000 people in 1990-2004. The Konan Bédié administration launched an ambitious healthcare development programme in 1996. The programme included the construction of 29 hospitals and more than 300 rural clinics, as well as the provision of 350 dispensaries and 450 maternal health centres. Although some of the programme has been implemented, many of the benefits have now been lost. In 2002 a new healthcare initiative, Assurance maladie universelle, was promoted within the framework of the HIPC initiative, but it was interrupted by the outbreak of the civil war. A similar programme and targets cannot be set until progress has been made with the post-conflict reconstruction programme. The military and political conflict has also severely disrupted the provision of healthcare in the rebel-held north, although a number of hospitals and other facilities have managed to re-open with assistance from international organisations. Several private hospitals offer international-standard health services in the capital, Abidjan.

The threat of AIDS

According to UNAIDS, the international body co-ordinating the fight against AIDS, 750,000 people were infected with HIV in Côte d!Ivoire at the end of 2005. The infection rate among adults was said to be 7.1%, one of the highest in West Africa. About 65,000 people died of AIDS-related illnesses in the country in 2005 alone. An estimated 450,000 children aged 17 or younger have lost their mother or both parents to AIDS since the beginning of the epidemic. The government!s response to the disease has been slow. The national anti-AIDS programme was due to be reactivated in 2002, backed by a US$42m loan from the World Bank, but progress in fighting the pandemic has been set back hugely by the civil war. The war and the large population movements caused by it have aggravated the spread of the disease in recent years as prostitution, already on the rise owing to declining living conditions, has increased, especially where soldiers and rebel forces are positioned.

Natural resources and the environment

Except for the north-eastern region bordering Burkina Faso, Côte d!Ivoire has an equatorial climate, with two rainy seasons, the longest being between May and July. The country!s most fertile agricultural land, and its densest population concentration, lies along the south-eastern coastal strip, which is approximately 100 km deep. This area contains the country!s principal oil palm, coconut, pineapple and banana plantations, as well as important rubber plantations. Further inland and to the west, occupying much of the southern half of the

Poor healthcare provision

A fertile country

26 Côte d'Ivoire


country, are the rich, but quickly diminishing, forest lands, where most cocoa and coffee are grown, together with domestic food staples such as rice, cassava, plantain, yams and maize. Forested areas have declined from 12m ha to 3m ha since 1960. Strict regulations restricting commercial logging and agricultural encroachment have been established. The continued use of wood charcoal as a source of energy has undermined efforts at reforestation. The northern half of the country, where savannah land becomes Sahelian in character, principally produces cotton, sugar, millet, sorghum, groundnuts and maize.

In terms of mineral resources, Côte d!Ivoire has proven reserves of at least 220m barrels of oil and 1.1trn cu metres of gas. Recoverable reserves are likely to increase, given the promising discoveries that have recently been made in some of the deepwater blocks, such as the Baobab field, where production started in August 2005 and which should be in the range of 50,000 barrels/day (b/d). Apart from oil and gas, Côte d!Ivoire has substantial deposits of gold, iron and nickel. Total nickel reserves are estimated at 439m tonnes. The mostly unworked iron ore and bauxite reserves are estimated at 1.5bn tonnes and 1.2bn tonnes respectively, and manganese reserves are estimated at 35m tonnes.

Transport, communications and the Internet

Côte d!Ivoire has the most developed road network in West Africa, with around 82,000 km of classified roads, about 6,500 km of which are primary roads and 7,000 km secondary roads. Underinvestment since the 1980s has left many roads in a poor state, and, as hardly any maintenance work has been undertaken since 1999, some road sections have collapsed. This is likely to be a priority for the government once the political stalemate is broken and the reunification of the country gets under way. In addition to the need to extend and overhaul the road network, a major frustration for freight carriers since September 2002 has been the large number of checkpoints on the roads and the system of formal and informal fees that the national army, the New Forces and local militias have imposed in locations under their control. Devices used include official "security corridors" at the entrances to major cities, secondary roadblocks and escort fees for trucks that travel in convoys between the government- and rebel-controlled zones.

Another priority for the government when the conflict ends will be to ease traffic congestion in the commercial capital, Abidjan. Abidjan!s population was officially estimated at 2.9m in the 1998 population census, equivalent to about 19% of the country!s population. In 2006 it was estimated at 3.9m, representing approximately the same share of the population. Public transport provision has been outpaced by rapid urbanisation. The services of the 60% state-owned bus company, Société des transports abidjanais (Sotra), are saturated, and plans to set up a privately owned bus company, Société des transports urbains (Sotu), focusing on the densely populated areas of Yopougon and Abobo, have failed to materialise. There are an estimated 15,000 taxis in the capital.

The road network needs an overhaul

Traffic congestion

Côte d'Ivoire 27


The only railway in Côte d!Ivoire links Abidjan with Ouagadougou in Burkina Faso. Société ivoirienne des chemins de fer (SICF) was privatised in 1994 and a French-led consortium, Sitarail, now manages the line, although it had to suspend operations for several months in 2002, which was costly. The railway line is now open again, but traffic has been considerably reduced. Total merchandise freight was estimated at 569,244 tonnes in 2004, compared with 179,677 tonnes in 2003 but was 1m tonnes in 2001. The number of railway travellers recovered somewhat in 2004, to 163,790, from 88,971 in 2003, but remains low compared with 287,816 in 2001. There are plans, in theory, to extend the railway line to Bamako, the Malian capital, and to Niamey, the capital of Niger. Although slow and more expensive, railway freight is often preferred over road transport because delivery is more reliable.

The modernisation and expansion of Abidjan!s international airport was completed in 2000. Although the airport can now handle up to 2m passengers per year, plans to boost traffic have been thwarted by the political unrest of recent years. Total passenger traffic has therefore fallen from 1m in 2001 to 776,000 in 2005. The pattern of air travel has also changed significantly as a result of the desertion of Abidjan airport by most of the long-haul carriers that previously served it. The main international airlines are Air France, SN Brussels, Royal Air Maroc, Emirates and various African companies, with Air Ivoire, Air France, Air Sénégal and Royal Air Maroc accounting for approximately two-thirds of passenger traffic. Aeria of France took over the management of the airport in 1997. In October 2001 Air France, in consortium with the AIG African Infrastructure Fund, took up a 51% stake in the domestic carrier, Nouvelle Air Ivoire; the remaining 49% share is state owned. Nouvelle Air Ivoire began operations on March 31st 2001 with a fleet of three Fokker 28-400e aeroplanes serving domestic and regional routes, but its performance has been adversely affected by the downturn in air passengers since September 11th 2001 and, since 2002, by the division of the country and general instability. In October 2006 Ivoirienne de transport aérien (ITA) was launched with flights between Abidjan and San-Pédro.

The port of Abidjan, Port autonome d!Abidjan (PAA), is the busiest in francophone West Africa but has suffered greatly from the political and military crisis, as has the country!s second port, at San-Pédro, where ambitious expansion plans are on hold. PAA!s export activities were helped by bumper cocoa harvests in 2000-03, but imports declined owing to the depressed domestic economy, political instability and a series of dockers! strikes. The advent of civil war sharpened this decline and, crucially, suffocated transit shipments to and from third countries"these had collapsed by close to 95%, to 15.5m tonnes in 2003 (at both Abidjan and San-Pédro ports), although they have partly rebounded since, to 18.5m tonnes in 2005. Neighbouring ports, most notably Tema (Ghana) and Lomé (Togo), have seen their traffic increase over the past four years as a result.

Nevertheless, loading and off-loading facilities at PAA remain competitive and port activities are expected to remain important, even if some traffic may now have been permanently lost. An Anglo-Dutch consortium, led by P&O

Falling rail traffic

Many airlines stop their services

Abidjan is a busy regional port

28 Côte d'Ivoire


Nedlloyd, has been awarded a 30-year build-operate-transfer concession to build a new terminal on the other side of Abidjan!s lagoon, in Locodjoro, although work has yet to begin. The new terminal will double Abidjan!s container-handling capacity if built. In February 2004 PAA announced the award of a long-term concession to Bolloré of France to manage its container terminal facility, a move that caused immediate controversy owing to the no-bid arrangement, the fact that other potential candidates were overlooked, and because Bolloré already controls the railway line and a cocoa export firm, among other assets.

The telecommunications sector has experienced extremely rapid growth since the granting of a first Global System for Mobile Communications (GSM) licence and the government!s sale of the national telecommunications company, CI-Télécom, to France Télécom in 1997. By 2004 the now renamed Côte d!Ivoire Télécom was operating 238,000 fixed lines, compared with 120,000 at the time of privatisation. The state has retained 49% of the company. By far the greatest progress has been in the mobile-phone sector. According to official data there were 2.8m mobile-phone subscribers in mid-2006, a 17% increase in six months and a 39% increase in 12 months.

There are now three mobile-phone companies operating in the country and a fourth set to start service soon. The established operators are Orange Côte d!Ivoire (previously also known as Ivoiris), owned by France Telecom (85%), with 1.5m subscribers, and MTN Côte d!Ivoire (which in July 2005 replaced Telecel, which was bought by a South African firm, MTN International), with 1.2m subscribers. A third firm, Moov Telecom, was launched in July 2006 and has an estimated 500,000 subscribers. It is a brand of Atlantique Telecom, which is 50%-owned by Etisalat of the United Arab Emirates. The newest entrant is Comium, a Lebanese telecommunications company with operations in several African countries, which obtained a licence in July 2006 and has announced plans to begin service in the first quarter of 2007. The fast spread of mobile phones has spawned a vibrant business in mobile "phone booths", which are found on virtually every street corner.

The Ivorian press is mainly a mouthpiece for political parties, but some papers are considered to be relatively balanced. Journalists have been accused of fuelling ethnic rivalry since 1999. Côte d!Ivoire ranked 98th out of 168 countries in the 2006 Press Freedom Index published by a Paris-based international organisation that defends press freedom, Reporters sans frontiers (RSF). The long-time quasi-official daily, Fraternité-matin, which claims a circulation of 50,000, has been a relatively reliable source of information. Another daily, Notre voie, is owned by the pro-Front populaire ivoirien Nouvel Horizon media group and voices opinions close to those of the president, Laurent Gbagbo. Le National is pro-Parti démocratique de Côte d!Ivoire and Le Patriote is pro-Rassemblement démocratique des républicains. Two recent additions, Le Front and 24 Heures, are generally critical of Mr Gbagbo, but relatively balanced. There are a number of other, less professional, newspapers in circulation.

The press is relatively partisan

The telecommunications sector is expanding fast

Côte d'Ivoire 29


Radiodiffusion-Télévision Ivoirienne (RTI) is a government-owned corporation that is partly funded by advertising, which operates two television channels and a national radio service that broadcasts in French and local languages. RTI news is staunchly pro-government. Since September 2002 RTI has, along with other media, played an increasingly propagandist role and helped to inflame the crisis in the country. The main satellite television service is provided by Canal Satellite, a division of France!s Canal+. This offers a range of French and international channels, which are increasingly popular in middle-class homes. There are a number of private FM radio stations in Abidjan and other cities, in addition to which the New Forces have set up broadcast operations in several of the cities that they control. Abidjan has FM relays of Radio France International, BBC Africa and Africa No. 1 radio, and the UN peacekeeping mission operates a radio station, ONUCI FM.

The Internet in Côte d!Ivoire is well developed by regional standards and there are numerous cyber-cafes and domestic websites. Côte d!Ivoire Télécom!s Internet service provider, Aviso, and AfricaOnline dominate the market, followed by Afnet and Comet. Aviso alone provided Internet access to some 7,000 subscribers as at end-2001. Internet telephony has made inroads as well, particularly for international calls"there has been a proliferation of Voice over Internet Protocol (VoIP) calling stations that bypass the operator!s network. In addition, Abidjan has recently become the site of a WiMax deployment by a US firm, NextNet, through Afnet. As a result, a broadband Internet connection is now available across most of the city for any computer equipped with a dedicated wireless modem.

Energy provision

Côte d!Ivoire is a net exporter of electricity. Gas-powered stations generate more than half of the country!s annual production. The first gas-fired plant, Vridi II, was built in late 1995 near Abidjan. Another power station at Azito, in Abidjan!s suburbs, began to supply electricity to the grid in 1999. The phased construction of a third turbine in Azito has been delayed pending a satisfactory increase in domestic and regional demand for electricity through the West African Power Pool and the extension of the national grid. Although they are no longer running at full capacity, hydroelectric plants (Ayamé I and II, Kossou, Taabo, Buyo and Grah) still generate about 37% of the country!s electricity. Fuel-powered individual generators are widely used.

The use of gas-fired electricity plants has turned the country into a regional exporter of electricity. Some 1,236 gwh were exported to Benin, Ghana and Togo in 2000, and the domestic grid was connected to Burkina Faso in 2001. Electricity production was estimated at 5,370 gwh in 2004, with domestic consumption of 3,106 gwh. The government has made rural electrification a main priority, aiming to connect 200 rural districts to the national grid every year. According to official estimates, less than 15% of the population living in rural areas has access to electricity compared with 77% in urban areas and 88% in Abidjan. Compagnie ivoirienne d!électricité (CIE), which is 51% owned by a

Internet access is relatively well developed

Electricity generating capacity is high

30 Côte d'Ivoire


subsidiary of France!s Bouygues group (Bouygues! 15-year term of concession of CIE was renewed in October 2005), has a monopoly on electricity supply.

Côte d!Ivoire!s own oil is mainly exported (60% goes to the US), while oil is imported (from Nigeria, in particular) and refined for domestic use. Petroleum products are also exported to the region, even to oil-rich Nigeria, which has suffered persistent shortages of refined products. Société ivoirienne de raffinage (SIR), situated at Vitry, near Abidjan, has a processing capacity of 65,000 b/d of crude oil. It produces petrol, diesel fuel and gas oil. Owing to the increase in domestic oil production (see Economic sectors: Mining and semi-processing) and high world prices, SIR saw a 50% increase in activity in 2005. This resulted in increased exports of refined products, which reached 3.1m tonnes in 2005 compared with 2.5m tonnes in 2004. Nigeria accounted for 35% of exports, while a total of 85% went to African countries. Although the privatisation of the refinery, including its tar-producing subsidiary, Société multinationale de bitume (SMB), has remained on the policy agenda, political developments have delayed the sale of the government!s 47% stake in the company. The petrol storage company, Gestoci, and the state hydrocarbons company, Petroci, are also to be privatised. Audits of the petroleum sector were undertaken in 2006 under the aegis of the World Bank and are expected to be made public by mid-2007.

The economy

Economic structure

Main economic indicators, 2006 (Economist Intelligence Unit estimates unless otherwise indicated)

Real GDP growth (%) 1.2

Consumer price inflation (av; %) 2.4

Current-account balance (US$ m) 873.0

Exchange rate (av; CFAfr:US$) 522.89a

Population (m) 18.4

External debt (year-end; US$ m) 11,944.6

a Actual.

Source: Economist Intelligence Unit, CountryData.

According to the most recent World Bank estimates, the agricultural sector, including forestry, accounted for 26.9% of GDP in 2004. Côte d!Ivoire is the world!s largest producer of cocoa, accounting for around 40% of global supply, and the country!s economic growth tends to reflect fluctuations in revenue from this all-important crop. Côte d!Ivoire is also Africa!s largest producer of robusta coffee, ranking fourth or fifth in terms of world production. The industrial sector, including construction, accounted for 18.7% of GDP in 2004. Prior to the current crisis, manufacturing activities had expanded rapidly, led by agro-processing but also including the production of a wide variety of consumer goods for domestic use and export to the region. The production of petroleum products is a growing sector. Services are mostly led by trade and transport activities and accounted for 54.4% of GDP in 2004.

Oil exports to the US

Côte d'Ivoire is world's largest supplier of cocoa

Côte d'Ivoire 31


World cocoa supply ('000 tonnes, crop years, which can vary slightly)

2004/05 2005/06Côte d'Ivoire 1,286 1,387Ghana 599 740

Indonesia 460 470Nigeria 200 170Cameroon 184 168

Brazil 171 162Ecuador 116 115

World total (incl others) 3,382 3,592

Source: International Cocoa Organisation, Quarterly Bulletin of Cocoa Statistics.

On the expenditure side, private consumption accounted for 67.4% of national income in 2004, with government consumption accounting for another 11.6%. Net trade of goods and services brings a positive, albeit small, contribution to GDP each year, while gross fixed investment has remained low in recent years, representing 9.2% of GDP in 2004.

In the past Côte d!Ivoire was often dubbed the "milk cow" of the West African Franc Zone, accounting for roughly 40% of total GDP produced in the Union économique et monétaire ouest-africaine (UEMOA). In addition, immigrant workers! remittances from Côte d!Ivoire were important to landlocked economies like Burkina Faso and Mali. However, Côte d!Ivoire!s position as the unchallenged economic hub of francophone Africa is now in question: Cameroon is now as large an economy as Côte d!Ivoire, and Senegal is also seen as an increasingly attractive destination. Côte d!Ivoire also faces increasing competition in the region from English-speaking Ghana and Nigeria.

The conflict and the continued political stalemate have also resulted in diversions from normal trade routes, with the landlocked countries turning to ports in Ghana, Togo and Senegal instead of Abidjan. Many foreign and even Ivorian companies have shifted personnel, offices or production facilities to Dakar (Senegal) or Lomé (Togo). The African Development Bank (AfDB), which has its headquarters in Abidjan, has moved most of its personnel and operations to Tunis, in principle temporarily. In addition, it is estimated that 8,000 French nationals left Côte d!Ivoire in November 2004 and it is too early to tell how many will return. The departures have resulted in lay-offs and the closure of small and medium-sized French-owned businesses, as well as fire-sales of French-owned assets, notably to members of the Lebanese business community as well as to well-connected Ivorian business people. French firms still run the public utility companies under concession contracts, however. Although Côte d!Ivoire still retains many advantages over other countries in the region in terms of better infrastructure and a more skilled labour force, it will take a prolonged period of political stability and economic reconstruction for the country!s economic pre-eminence to be re-established.

The country's economic dominance has faded

32 Côte d'Ivoire


Comparative economic indicators, 2006 Côte d'Ivoirea Ghanaa Nigeria a South Africaa Francea

GDP (US$ bn) 16.7 11.9 115.6 252.3 2,233.1

GDP per head (US$) 906 528 808 5,965 36,675

GDP per head (US$ at PPP) 1,815 2,806 1,217 14,066 32,465

Consumer price inflation (av; %) 2.4 10.9 9.8 4.6 2.0

Current-account balance (US$ bn) 0.9 -0.6 11.2 -12.6 -42.6

Current-account balance (% of GDP) 5.2 -4.8 9.7 -5.0 -1.9

Exports of goods fob (US$ bn) 8.4 3.7 56.0 59.5 482.0

Imports of goods fob (US$ bn) -5.8 -6.3 -23.9 -63.3 -530.2

External debt (US$ bn) 11.9 3.7 6.0 31.1 �

Debt-service ratio, paid (%) 4.3 3.1 1.9 6.9 �

a Economist Intelligence Unit estimates.

Source: Economist Intelligence Unit, CountryData.

Economic policy

The central feature of Côte d!Ivoire!s economic policy is the pegged exchange-rate regime whereby monetary policy is determined by the regional central bank, Banque centrale des Etats de l!Afrique de l!ouest (BCEAO). As a result of this, the government relies on fiscal policy as its main policy instrument. This has proved highly problematic over the years and fiscal policy has been the main source of disagreement with the IMF. In particular, at times of economic and political crisis, the country has tended quickly to accumulate both domestic and external payment arrears.

Policy in the 1970s was set against a background of high cocoa prices and high hopes for the oil sector. As a result, there was an air of false optimism and the government borrowed lavishly in the late 1970s, a problem that Côte d!Ivoire is still paying for. As commodity prices fell and economic growth slowed in the 1980s and into the early 1990s, it was eventually agreed to devalue the CFA franc in 1994. This set off a new generation of reforms, which were supported by the IMF under various lending facilities. However, since 1999 relations with the IMF have been difficult. Payments were withheld in early 1999 because of fiscal slippage and transparency issues, as well as the slow pace of reform, and the government and the Fund struggled to reach a compromise. General Robert Gueï!s transitional government inherited a state in crisis in 2000 owing to depressed world prices for cocoa and because the IMF, the World Bank and the EU were withholding budgetary support. Negotiations with the IMF over a staff-monitored programme (SMP) failed in 2000 because of fiscal slippage and outstanding governance issues, and, despite progress in liberalising trade and the cocoa and coffee sectors, the privatisation programme remained stalled.

In June 2001, following the restoration of the EU-Côte d!Ivoire economic co-operation programme and the adoption of a trimmed budget for 2001, the IMF approved a six-month SMP. The IMF expressed general satisfaction with progress and formally resumed its financial assistance on March 29th 2002, under a US$366m poverty reduction and growth facility (PRGF) scheduled to

Little room for economic manoeuvre

The IMF resumes its support

Relations with the IMF have been difficult

Côte d'Ivoire 33


last until March 28th 2005. Under the PRGF the government committed itself to better public-expenditure control, tighter fiscal control procedures, and measures to streamline and reinforce the tax structure, as well as to developing a programme to pay off arrears.

Relations with the IMF (SDR m unless otherwise indicated)

Type of loan Approval date Expiry date Amount approved Amount drawnPRGF Mar 2002 Mar 2005 293.68 58.54

PRGF Mar 1998 Mar 2001 285.84 123.86PRGF Mar 1994 Jun 1997 333.48 333.48

Source: IMF.

Since the onset of the crisis in September 2002, which resulted in the suspension of the IMF programme, the government has found it increasingly difficult to keep up with its obligations. Although it assiduously kept current with its World Bank and IMF payments for as long as possible"while lapsing into arrears with all its other major creditors"this too proved impossible by June 2004. The resulting formal suspension of World Bank programmes came on top of the political requirement, issued after the original peace agreement in January 2003, that the country should achieve the peace settlement as envisioned prior to the resumption of any non-emergency international programmes. The specific sums that donors promised at that time to aid reconstruction"totalling #400m (US$504m)"have yet to be disbursed, owing to the lack of progress on the political front. Only with the end of the current political crisis and the clearance of payment arrears will the government be able to approach the World Bank and the IMF to agree new programmes, although both organisations have maintained close contact with the govern-ment and sent fact-finding missions to Abidjan during the course of the crisis.

The economic policy of successive governments since the crisis broke out has focused simply on keeping the main functions of government operating. During its tenure (2003-05) the national reconciliation government of the former prime minister, Seydou Diarra, focused on its urgent and politically sensitive obligations, particularly paying civil service wages, with all other matters taking lower priority. It sought to boost revenue by all means available, including a solidarity levy on salaries announced in early 2004, a series of new licences and fees for various activities, and efforts to improve tax collection. Since 2006 the two successive governments under the current prime minister, Charles Konan Banny, have faced the same basic priorities and economic policy has remained focused on the short-term management of finance. In any event, no government under present conditions has much margin for manoeuvre, as the tax base has shrunk owing to the economic downturn and the closure of small businesses. In addition, the government!s inability to clear its domestic arrears has had knock-on effects throughout the economy, further weakening the position of firms.

Economic policy is kept in abeyance by the crisis

IMF programmes are suspended again

34 Côte d'Ivoire


As it has few alternative sources of revenue, the government has attempted to extract maximum revenue from the all-important cocoa sector. Côte d!Ivoire!s position as the world!s largest producer has afforded it some cushion, with the markets tending to drive the world price of cocoa higher when political prospects in the country look poor. Despite this, and with favourable weather and large harvests in crop years 2002/03 and 2003/04, the government!s squeeze on the sector"including a standard duty on cocoa exports called the Droit unique de sortie (DUS), additional levies ostensibly to fund various sector support and development entities, and other miscellaneous fees"has begun to show signs of exhaustion as increasing volumes of cocoa are being smuggled to Ghana where higher prices may be achieved. The situation has been made more complex, as it is widely understood that cocoa-sector revenue has helped to fund off-budget expenditure, particularly in the military domain. In recognition of ongoing funding problems and the likelihood of delays in disbursement by international donors, the government has also sought to raise funds on the domestic capital market: the government has issued three successful Treasury notes since the beginning of the crisis. In addition, the government is increasingly looking, for immediate support, to regional lenders and to the expansion of ties with new trade partners such as China or India.

Recent Treasury-bond issues (CFA francs bn unless otherwise indicated)

Interest rate (%) Total expected Total collectedTreasury bond (2003-06) 7.0 30.0 40.4Treasury bond (2005-08) 6.5 40.0 86.1

Treasury bond (2006-09) 6.5 80.0 84.2

Source: Direction de la dette publique.

Policy priorities inherited from the pre-conflict period, which will need to be addressed when the conflict ends, include embarking on long-delayed privatisations, particularly that of the state oil refinery, Société ivoirienne de raffinage (SIR), re-organising the cocoa and coffee marketing structures; and boosting investment in line with a poverty reduction strategy paper (PRSP), which will focus mainly on priority sectors. This would eventually allow Côte d!Ivoire to receive debt relief under the IMF-World Bank!s heavily indebted poor countries (HIPC) initiative.

Economic performance

A deep recession gripped Côte d!Ivoire throughout most of the 1980s, induced by an overvalued currency, a fall in global commodity prices and the high cost of servicing debts incurred in the 1970s. In 1991 the prime minister, Alassane Ouattara, introduced a harsh and unpopular adjustment programme supported by international donors. The 50% devaluation of the CFA franc in 1994 marked a turning point for the economy. Annual real GDP growth increased from 1.8% in 1994 to an average of 6.3% in 1995-98, led by recovery in the industrial sector and supported by increases in exports of cocoa, coffee, timber and oil. The economy also benefited from healthy rises in world coffee and cocoa prices from mid-1994, which, combined with the devaluation, boosted farm incomes.

A short-lived return to prosperity

Government seeks alternative sources of funding

Côte d'Ivoire 35


With the benefits of the 1994 devaluation fizzling out, strained relations with external donors and a new dip in world commodity prices, Côte d!Ivoire!s economy started to slow down in 1998. In 1999 real GDP growth decelerated to 1.6% as a result of an 18% fall in world cocoa prices and a 32% fall in world coffee prices. The situation deteriorated further in 2000, when all external assistance was frozen following General Gueï!s coup and world cocoa and coffee prices dropped by 22% and 39% respectively. Because of this, and coupled with the subsequent political uncertainty and then the advent of civil war in late 2002, real GDP contracted each year between 2000 and 2003, except for 2001 (when real GDP rose marginally, by 0.1%). Although the economy has continued to stagnate, real GDP growth recovered slightly, to 1.6% in 2004 and 1.8% in 2005 and to an estimated 1.2% in 2006 as a result of the strong performance of the cocoa sector as well as increased oil production and high world prices.

Membership of the Franc Zone has helped to contain inflationary pressures, owing to mechanisms that restrict the use of money to finance fiscal deficits. Owing to the government!s firmness on public-sector wages and the strength of the French franc (and thus the CFA franc) against the dollar, inflation fell from the high levels that followed the 1994 devaluation to 2.5% in 1996, and averaged 2.9% in 1996-2000. Average inflation accelerated to 4.3% in 2001, owing to rising oil prices, increased electricity tariffs and the introduction of value-added tax (VAT; at a higher rate than the old sales tax). Although average inflation fell back to 3.1% in 2002, prices rose sharply towards the end of the year owing to shortages created by the civil war, and inflation reached 3.3% in 2003. Inflation fell to 1.4% in 2004 as the adverse impact of the ongoing economic and political crisis on daily life and on prices was tempered by the widespread availability of foodstuffs, helped by Côte d!Ivoire!s rich agricultural base. Given the low base of the consumer price index in 2004 and increased difficulties in trading basic goods, inflation picked up to 4% in 2005, but is estimated to have fallen back to 2.4% in 2006.

The informal sector is on the rise

Statistics are not adequate to capture the condition of an economy where the informal sector and smuggling are on the rise, as is the case with Côte d!Ivoire, particularly in the north. The peculiar condition of "neither war nor peace" that has prevailed for the past four years has now been in place long enough for internal trade between the two zones to have become lucrative for those in a position to benefit from it. Imported consumer goods are entering the northern zone through what amounts to open borders with Burkina Faso and Mali, without import duties, and are therefore available at a considerable discount on the prices that prevail in Abidjan. As a result, the internal smuggling of goods such as motorcycles has risen. In the other direction, export products such as cocoa are moving northwards, and from there to neighbouring countries where they can avoid the heavy tax burden that the Ivorian government has imposed. Banks in the north remain closed, and many residents, particularly those who receive state civil service salaries or pensions, must travel to Abidjan or make alternative arrangements to have access to their cash. However, a funds transfer industry has sprung up to meet these needs, and between this and the flourishing

Inflation is low

36 Côte d'Ivoire


illicit trade the economy in the north is clearly functioning, although not in ways that can easily be quantified. Military personnel on both sides of the ceasefire line profit from cross-zone travel and trade by charging fees at the entrances and exits to their zones, and, with four years having now elapsed in this fashion, there are considerable vested interests in prolonging the status quo.

Regional trends

Côte d!Ivoire!s economy is centred on the south; Abidjan is the country!s commercial and financial hub. The cocoa and coffee region in the south-west is linked to the second major port, San-Pédro. Cash crops are grown in the coastal region and the south of the country is also the site of most manufacturing activity. A former president, Félix Houphouët-Boigny, developed the central part of the country around the official capital, Yamoussoukro (formerly a village, in which he was born), but Abidjan has remained the focus of economic and political life. By contrast, the north has always been less developed; cotton production is the main activity. The division of the country into rebel-held north and government-held south has heightened these disparities. However, the conflict only briefly interrupted trade and travel between the two zones, ensuring that intrastate commerce continues, albeit at a diminished rate.

Economic sectors

Agriculture

Agriculture dominates the economy, accounting for 23% of GDP and providing employment for 49% of the labour force. The principal food crops are cassava, yams, sweet potatoes, maize, millet, sorghum, rice and plantains. Sugar cane is also produced for domestic use. Cereal import requirements, mostly wheat (316,000 tonnes in 2006, according to the UN Food and Agriculture Organisation) and rice (850,000 tonnes), are supplied on commercial terms. Milled rice production rose from 541,000 tonnes in 2004 to 690,000 tonnes in 2005. The most important cash crop by far is cocoa, of which Côte d!Ivoire is the world!s largest producer. In addition, the country is the fourth- or fifth-largest coffee producer in the world. Together, cocoa and coffee account for 60% of the area under cultivation. They are mostly produced by smallholders. The main cocoa harvest takes place in October (through to March) and there is a smaller mid-season harvest between May and August. Annual production of cocoa has risen sharply since the mid-1990s, to 1m tonnes or more (annual production of 700,000-800,000 tonnes was the norm in the 1980s). Despite the outbreak of armed conflict on the fringes of the cocoa-producing region, with cocoa prices reaching 20-year highs there was strong incentive for producers while the government gained some breathing space. Cocoa production totalled 1.36m tonnes in crop year 2002/03 (October-September) and 1.41m tonnes in 2003/04.

An economy centred on the south

Agriculture provides a livelihood for the majority

Côte d'Ivoire 37


The cocoa sector has continued to withstand the strain of the conflict despite mounting difficulties and to provide badly needed revenue for the government. Despite fears of a sharp fall in production, output was relatively stable, at 1.29m tonnes in 2004/05 and 1.4m tonnes in 2005/06. This resilience is noteworthy considering adverse conditions such as the depletion of the labour force in the cocoa-producing zone, the persistence of roadblocks and corruption on the transport routes, the failure to sustain agricultural extension services, and, most of all, the downward pressure on domestic farmgate prices (falling as low as CFAfr250-300/kg"47-57 US cents/kg), which is undermining production and driving large volumes of Ivorian cocoa to be smuggled into Ghana and other neighbouring countries where prices are higher. Crossborder smuggling to benefit from price differentials is a fact of life in the cocoa sector, but Ghana!s announcement of record cocoa production in 2004, surpassing a 40-year record by close to one-third, is an indicator of outflows from Côte d!Ivoire, which have continued in 2005 and 2006. Another factor contributing to the decline of the sector is the deterioration in the quality of coca beans"meaning that Ivorian cocoa is attracting a lower price on the international market"as a result of the lower use of pesticides and of problems with drying the crop and storing it. Ageing plantations"it is estimated that 50% of total plantations in Côte d!Ivoire are more than 30 years old"are also contributing to the trend.

Cocoa marketing has long been marred by poor performance and corruption and has been in institutional flux for the past decade. The government sought to disband agricultural marketing boards throughout the 1990s, as years of poor management, coupled with insufficient financial provision against world price fluctuations, led to huge costs. The government took the final step of liberalising domestic cocoa prices in August 1999. This, in effect, put an end to the 37-year-old stabilisation system, under which the agricultural marketing board, Caisse de stabilisation des prix des produits agricoles (Caistab), announced fixed prices to producers and exporters at the beginning of each season. The move coincided with a slump in world prices, however, leading to strong protests from farmers. The farmers! main demand was for the creation of a privately run price stabilisation system in 2001, following the creation of the Bourse du café et cacao (BCC).

However, the resulting system has proved unsatisfactory: there are now a plethora of marketing organisations with overlapping responsibilities that have proven vulnerable to political misuse. The drop in world cocoa prices between 2002 and 2003 increased pressure on the sector and sparked conflict among these organisations as the new stabilisation system, the Fonds de régulation du café-cacao (FRC), proved unable to make support payments to farmers, despite its high intake of funds while prices were high. This appeared to confirm the widespread suspicion that funds were being diverted for off-budget government spending and caused a split among powerful cocoa planter interests, some remaining allied with the government while others called for a sector audit and new institutional reforms. To quell the discontent, the government agreed to a sector audit under EU supervision in 2004; leaks of the report in late 2005 buttressed the suspicions and confirmed instances of sector fund misuse. During 2006 discontent among cocoa farmers grew and a strike was narrowly

Cocoa marketing remains a problem

Performance of the cocoa sector deteriorates

Gagnoa

Cocoa-producing regionMALI

GHANA

GUINEA

LIBERIA

YAMOUSSOUKRO

Abidjan

New Forces zone

"Confidence zone"Cocoa production

0 km 100 200

38 Côte d'Ivoire


averted at the start of the 2006/07 main harvest in October, once again raising the question of how long the sector can maintain high output in the current institutional and economic environment.

Institutional chaos in the cocoa sector

Following the disbanding of the agricultural marketing board, Caisse de stabilisation des prix des produits agricoles (Caistab), in January 1999, marketing arrangements in the crucial cocoa sector have remained in a state of flux. The new regulatory and development bodies that were finally set up in advance of the 2001/02 season included the following. • The Bourse du café et cacao (BCC), which is 66%-owned by farmers and

33%-owned by exporters. The BCC monitors the marketing season and fixes recommended producer prices every three months.

• The regulatory authority, Autorité de régulation du café et cacao (ARCC). The ARCC manages a system of purchasing quotas, which are revised every three months.

• Fonds de régulation et de contrôle (FRC), which was formally set up in March 2002. The FRC finances the price stabilisation system by raising taxes on cocoa exports and forward selling.

• Fonds de développement de la production du café-cacao (FDPCC), which uses levies from exports to fund agricultural extension and other support activities.

In practice, all of these entities came under the control of powerful cocoa planters with ties to the government, grouped in the major producers! union, Association nationale des producteurs de café-cacao de Côte d!Ivoire (Anaproci), which ensured some degree of operational cohesion. Since mid-2004, however, a rift has opened up between staunch regime loyalists, led by Sansan Kouao, and planters upset at the government!s depletion of sector funds, led by Henri Amouzou, throwing all these institutions into political conflict. At the same time, new organisations claiming to represent farmers of various sizes and regions have proliferated. Although cocoa output has remained solid in recent years, these conflicts underscore the growing exhaustion of the cocoa sector as a revenue source of last resort. The release of international audit reports critical of the institutional confusion in the sector and the government!s handling of sector accounts confirms the need for a new round of sector marketing reforms when a peace settlement is achieved.

Côte d!Ivoire!s coffee production is 250,000-300,000 tonnes in normal years. Coffee cultivation reached a peak of 379,100 tonnes in 1999/2000 (October-September), but fell back to 301,100 tonnes in 2000/01 and to only 188,700 tonnes in 2002/03 (according to the International Coffee Organisation, ICO), mainly because world coffee prices have been depressed since 1999 owing to massive oversupply in the market and because of problems with the crop!s marketing arrangements, which it shares with cocoa. The start of the current crisis in 2002 has contributed to a further decline in production, to 161,340 tonnes in 2003/04 and 129,960 tonnes in 2005/06. Preliminary estimates show a slight recovery in coffee production, to 141,000 tonnes, in 2006/07.

Palm oil and rubber are two other traditional export crops, although their production has greatly declined over the years owing to low prices and the

Other export crops

Côte d'Ivoire 39


availability of substitutes. Palm oil production fell to only 215,900 tonnes in 2001 before rebounding to 292,800 tonnes in 2004 and 270,800 tonnes in 2005. Rubber production now seems to have stabilised"production was 147,900 tonnes in 2003, 141,400 tonnes in 2004, and 159,800 tonnes in 2005.

Côte d!Ivoire became one of the Franc Zone!s leading producers of cotton in the early 1990s, with production of 393,000 tonnes in 2001/02 and 396,100 tonnes in 2002/03, slightly down on the 398,700 achieved in 1999/2000. However, cotton is produced largely in the rebel-held northern part of the country, and its production and export have been severely disrupted by the conflict. It has become difficult to gauge real cotton production levels, as only a fraction of cotton is being delivered to the textile mills and export facilities in the government-held zone while considerable amounts are being sold into Mali and Burkina Faso. According to local sources, cotton production totalled 268,000 tonnes in 2005/06, down from 396,100 tonnes in 2002/03. Production in 2006/07 is estimated to have slowed to around 180,000-200,000 tonnes.

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

1998 99 2000 01 02 03 04 05 06

Cocoa beans Coffee robusta Cotton

World commodity prices(US cents/lb)

Source: Economist Intelligence Unit.

Tropical fruit exports received a significant boost from the devaluation of the CFA franc in 1994, but have encountered some difficulties in the past two years. Production of bananas for export, which totalled 241,100 tonnes in 2000, reached 280,500 tonnes in 2004 but declined to 260,500 tonnes in 2005. Uncertainty prevails in this sector, since Côte d!Ivoire, like other African Caribbean and Pacific (ACP) countries, could lose its preferential access to the EU market"a quota of 162,500 tonnes"to the benefit of Latin American producers. Côte d!Ivoire is also a leading provider of pineapples to the EU market. Production for export totalled 270,800 tonnes in 2002, before falling to 188,700 tonnes in 2005 as a result of poor irrigation and increased competition.

Although forestry resources have become seriously depleted, timber remains a major export in Côte d!Ivoire. A regulatory regime designed to promote processing activities has been developed. Export eligibility is restricted to delimited concession areas and the use of local processing capacities. As a result, only processed wood is exported. According to the government, these exports declined from 537,500 tonnes in 2000 to 428,700 tonnes in 2004 and 401,600 tonnes in 2005.

Timber is a major export

Non-traditional exports

40 Côte d'Ivoire


Industrial fishing has been transformed since 1980 with large trawlers being progressively replaced by smaller boats. The total fish catch amounts to 80,000-100,000 tonnes/year (t/y). Industrial fishing accounts for up to 60,000 t/y, with the balance being the product of traditional fishing, which is dominated by Ghanaians. The Ministry of Agriculture estimates that consumption, which was about 250,000 t/y in the early 1990s, reached 400,000 t/y in 2000.

Mining and semi-processing

Espoir and Bélier, the country!s first offshore oilfields, were discovered in the 1970s. Oil production began in 1980 but then tailed off and ceased completely in 1993 because of the high operating costs involved. However, hopes were rekindled the following year, when the US-based United Meridian Corporation (UMC), which was later bought by Ocean Energy, announced the discovery of two major fields, Lion (oil) and Panthère (gas and condensates). A production-sharing contract (PSC) was signed between UMC and the government, and production began in 1995, with oil production surging from 6,300 barrels/day (b/d) in the first year to 15,930 b/d in 1996. The Panthère field, also operated by Ocean Energy, produces about 90m cu ft/day. Another offshore gasfield came on stream in mid-1999, with daily production of 65m cu ft. The project is operated by Foxtrot, a joint venture led by two US companies, Apache and Ocean Energy, and a French company, Bouygues. With the Lion field running out of reserves, daily production fell to less than 6,000 b/d in 2001.

However, this trend was reversed in early 2002, when Canadian Natural Resources (CNR, previously Ranger Oil) resumed production at the Espoir field, with initial output of 8,500 b/d. As a result, oil production has picked up sharply, rising from 5,800 b/d in 2001 to 14,500 b/d in 2002, 20,600 b/d in 2003 and 21,800 b/d in 2004. Oil production has also been boosted by production from another oilfield, Baobab, developed by CNR. Production at Baobab started in August 2005, at an average of 48,000 b/d, contributing to the increase of total oil production to 39,900 b/d in 2005. CNR expects oil production to increase to 65,000 b/d in 2006 as the remaining wells are completed. Baobab!s reserves are estimated at 200m barrels. Daily gas output also picked up sharply, from 123m cu ft in 2001 to 153m cu ft in 2004 and 168m cu ft in 2005.

Oil and gas production has, in general, remained insulated from political events, as it takes place at offshore fields serviced directly from Abidjan. A measure of the sector!s insulation from the political crisis is that it continues to attract investors. In October 2005 a US energy company, Vanco, announced that it had signed two new PSCs with the government, covering blocks CI-401 and CI-101. Vanco was already active in the country, with a PSC signed in 1999 covering blocks CI-109 and CI-112. New investors have also entered the sector in recent years: in July 2006 Russia!s Lukoil purchased a 63% stake in block CI-204 from Nigeria!s Oranto Petroleum.

Fishing is transformed

Oil production is set to triple

Offshore oil and gas

PantherePanthereBaobabBaobab

E EspoirE EspoirAcajouAcajou

Panthere Mantra

Foxtrot

Baobab

W Espoir

E EspoirAcajou

Kossipo

Gasfield

Oilfield

Gas pipeline

Planned gas pipeline

Prospective oil/gas field

Côte d'Ivoire 41


CI-111

CI-112

CI-109

CI-108

CI-107CI-104

CI-105

CI-12

CI-206CI-205

CI-102

CI-103CI-105

CI-100

CI-203CI-301

CI-300CI-25CI-25CI-11CI-11

CI-24CI-24CI-202CI-202CI-25CI-11

CI-24CI-202

CI-101

CI-401CI-110

ABIDJAN

Sassandra

TaTaboubouTabou

0 km 25 50

0 miles 25

Oil and gas concessions

CÔTE D'IVOIRE

LIBERIA

GHANA

Gold and diamond mining activities remain low key when compared with neighbouring countries like Ghana and Mali. Major diamond production sites are located in the northern part of the country and production is mainly artisanal. Diamond production, largely confined to industrial diamonds, was estimated at 266,000 carats in 2002. Production of diamonds has continued since 2002, although current levels of production and export are difficult to estimate: the UN Group of Experts on Côte d!Ivoire estimated that production in mid-2005 was 300,000 carats, and revenue from this is likely to provide an important income for the New Forces. Owing to the conflict, the export of Ivorian diamonds is illegal under a UN Security Council embargo that was first imposed in late 2004 and currently runs until October 31st 2007. However, there is evidence that Ivorian diamonds have entered the official supply chain in Ghana and are also being smuggled through Mali.

Gold mining is concentrated in two sites, Ity (in Western region) and Angovia (in Central region), and is dominated by Société des mines d!Ity (SMI), which is owned by a parastatal, Société pour le développement minier de la Côte d!Ivoire (Sodemi), and a French company, AREVA (formerly Cogema). Gold production (unrefined) had been broadly stable until 2002, at around 3,500 kg/year. Since September 2002 production has been disrupted and output fell to only 1,272 kg in 2004, but recovered to 1,637 kg in 2005. The Angovia mine remains definitively closed but Ity mines resumed production towards the end of 2003. An Australian company, Equigold, through its subsidiary, Equigold CI, is conducting feasibility studies on eight sites, including one in the New Forces-held territory, and has reported encouraging results. It has plans to apply to explore, or is waiting for permission to explore, another thirteen tracts.

Following tests in 1994 that indicated the presence of nickel ore in Sipilou and Gounguessou in North-western region, a Canadian company, Falconbridge, announced plans to invest US$500m over five years, and in 1996 signed a

Gold and diamond mining

Nickel and iron

42 Côte d'Ivoire


production agreement with the government. Exploration work indicated 123.9m tonnes of 1.57% nickel and 0.1% cobalt, plus an inferred resource of 134.2m tonnes of 1.39% nickel and 0.12% cobalt. Although this means that the resource is commercially exploitable, a rail link to the coast may need to be built and no development is possible until political stability is restored. The government was reported to be actively seeking foreign investors to exploit the vast iron ore deposits at Mount Kalayo, in an area straddling Côte d!Ivoire!s borders with Guinea and Liberia, until the outbreak of the crisis in 2002.

Manufacturing

By the standards of Sub-Saharan Africa, Côte d!Ivoire!s manufacturing base is well diversified, with a particularly well-developed agro-industry. Import-substituting industries benefited greatly from the 1994 devaluation, and output from agro-processing, textiles and clothing, and construction materials subsequently grew rapidly. Agro-industry also benefited from government initiatives to increase the local processing of cocoa beans, coffee, rubber, raw cotton, oil palm, and fruit and vegetables. However, the growth of manufacturing decelerated sharply in 1999, reflecting depressed consumer demand and flagging investment. Manufacturing growth turned negative in 2000, the biggest downturn taking place in construction-related industries, and has been depressed since then owing to political uncertainty and the weak economy. Despite a recovery in early 2002, the outbreak of civil war in September 2002 has led to a sharp contraction in the sector. Many factories have been forced to close down completely for a prolonged period and some may not reopen. Consequently, manufacturing output declined by 11.9% in 2002 and 13.2% in 2003, according to local sources. It recovered slightly in 2004 and increased by 7.5% in 2005, helped notably by increased production at the oil refinery. In the first nine months of 2006, however, manufacturing output is estimated to have fallen back by 10.1% compared with the same period in 2005.

Since privatisation started in the early 1990s, agro-industry has attracted by far the most foreign interest. Cocoa grinding is the leading activity. The government hopes to increase the share of the annual cocoa crop (about 1m-1.2m tonnes) that is processed locally to at least 50%. Côte d!Ivoire!s current grinding capacity is 350,000 tonnes. The main grinders are subsidiaries of two US commodities giants, Archer Daniels Midland (ADM) and Cargill; a Swiss group, Barry Callebaut; and Cantalou-cemoi of France. ADM and Cargill!s presence in Côte d!Ivoire as cocoa grinders is recent. ADM bought a majority share in an Ivorian group, Sifca, in 2000. Unicao, Sifca!s main cocoa-processing plant, can process 86,000 tonnes of cocoa per year. Cargill!s processing plant in Yopougon, Abidjan, became operational in October 2000. It has an annual grinding capacity of 65,000-100,000 tonnes of cocoa beans.

Other agro-industrial goods include coffee, sugar, cotton, milk, palm oil, fruit cans and processed fish. Beverages and tobacco are also manufactured locally. The government has heavily disengaged from the sector, although it still holds minority shares in some privatised parastatals. Most of them are quoted on the regional stock exchange, Bourse régionale des valeurs mobilières (BVRM),

Manufacturing has a mixed record

A dynamic agro-processing industry

Côte d'Ivoire 43


including Société ivoirienne des tabacs (Sitab, tobacco), Nestlé-Côte d!Ivoire (instant coffee) and Palm-Côte d!Ivoire (palm oil). Most food products processed in Côte d!Ivoire are exported in the subregion. However, the civil war and the ensuing instability have taken a severe toll on the agro-processing sector, and output declined by 20% in 2003, according to local sources. Agro-processing activity is estimated to have recovered slightly in 2004 and 2005 but to have fallen back by 20% in the first nine months of 2006.

The textile parastatal, Compagnie ivoirienne de développement des textiles (CIDT), was split into three blocks in October 1998. The government had been hoping to hand over 80% of the state-owned textile enterprise, CIDT-Nouvelle, to the farmers! co-operative, Union régionale des entreprises coopératives de la zone des savanes de Côte d!Ivoire (URECOS-CI), as the final stage of liberalisation. However, URECOS-CI has so far been unable to raise the necessary capital. CIDT-Nouvelle has four ginning mills, with a total capacity of 120,000 tonnes, and a silk mill. The other two major cotton-processing com-panies are La compagnie cotonnière ivoirienne (LCCI), which is 70%-owned by a Swiss-based group, Aiglon (with a total capacity of 200,000 tonnes), and Société Ivoire Coton, which is owned by the Aga Khan group and a Swiss group, Reinhart (with a total capacity of 123,000 tonnes). There are also two other ginneries created by farmers, Dopa and Sicosa, with a total capacity of 35,000 tonnes and 50,000 tonnes respectively. Overall, the country!s total ginning is of 528,000 tonnes, which largely matches domestic seed cotton production. Previously, because of a lack of ginning capacity, raw cotton sometimes had to be stored for long periods in less than optimal conditions.

Because cotton is grown in the north of the country, the civil war has adversely affected the industry, and production has been disrupted since 2002. In addition, companies operating in the sector are facing difficulties; this is particularly true of LCCI, where financial difficulties have resulted in arrears to producers. Continued financial difficulties resulted in LCCI being placed in the hands of the official receivers in December 2006, and in January 2007 the government set up a committee charged with clearing LCCI!s payment arrears to producers"estimated at CFAfr15bn (US$30.7m)"by the end of March. Meanwhile, however, LCCI has continued to trade. Although it is difficult to gauge how quickly the sector is poised to rebound when the ongoing conflict is settled, and what the consequences of LCCI!s liquidation will be, initiatives by the New Forces and other operators in the sector have resulted in a small recovery in recent years.

Construction

Once booming, activity in the construction sector was hit by the economic recession and political uncertainty in 2000-02, when most projects in housing and infrastructure (both expansion and maintenance) were brought to a halt. However, in early 2002 major donors committed to a five-year post-war reconstruction effort if peace was agreed. Much of this will go to construction projects and work is likely to move ahead on some big projects that have already been mooted, such as the construction of a toll bridge in Abidjan and

Cotton and textiles are restructured

Donors will fund construction if peace is agreed

44 Côte d'Ivoire


extension works at the Port autonome d!Abidjan (PAA). Separately, the government has pushed forward with plans to transfer public institutions to the administrative capital, Yamoussoukro, with a first phase of construction. A hotel and conference centre that is to house members of parliament during legislative sessions was completed in 2006 by Chinese construction firms. A parliament building, a presidential palace and a ceremonial avenue are slated for construction in Yamoussoukro. These projects comprise the sole large-scale public construction programme that is currently active. However, as public institutions are transferred to Yamoussoukro the city could become an important market for private construction. The demand for housing is high, particularly in Abidjan. About 500,000 tonnes of cement are produced and exported to the subregion each year, mostly by Société ivoirienne de ciments et matériaux and Société de ciment et de matériaux de Côte d!Ivoire, both of which are owned by a Swiss firm, Hodlercim.

Financial services

Following its August 2002 mission to the country, the IMF expressed grave concerns about the state of the banking sector in Côte d!Ivoire, particularly the quality of its loan portfolio in the face of a prolonged economic downturn. However, Côte d!Ivoire has a relatively diversified financial sector compared with most Sub-Saharan African states, with around 20 commercial banks and three financial institutions. Moreover, the largest commercial banks all have a foreign ownership stake, which will ensure that they have access to resources to help to ride any financial crisis. The largest banks are Société générale de banques en Côte d!Ivoire (SGBCI), which is 55% owned by Société Générale of France, and Banque internationale pour le commerce et l!industrie de la Côte d!Ivoire (BICICI), which is 56% owned by BNP-Paribas. Both banks are quoted on the regional stock exchange, Bourse régionale des valeurs mobilières (BRVM). The third-largest bank is Banque internationale de l!Afrique de l!ouest (BIAO), previously a subsidiary of Fortis Groupe!s Belgolaise, which was acquired in December 2006 by an Ivorian consortium composed of an insurance company, NSIA (60%), Caisse nationale de prévoyance sociale (CNPS; 20%) and the government (20%); it is followed by Société ivoirienne de banques (SIB), which is 51%-owned by Credit Lyonnais, also of France. Other commercial banks active in Côte d!Ivoire include Citibank, BNP-Paribas, Bank of Africa and Ecobank. There are two specialised state-owned financial institutions, Banque nationale d!investissement (BNI; previously known as Caisse autonome d!amortissement) and Banque de l!habitat (BIH).

Commercial banks have been shut in the zones of the country held by the New Forces since the start of the civil war, and local residents have alleviated the cash shortage by means of wire transfers to neighbouring countries, personal trips to the government zone and a variety of courier services that have sprung up. However, in February 2005 the region!s first bank, Caisse d!épargne populaire et de crédit de Côte d!Ivoire (CEPC-CI), was opened in Bouaké.

The banking sector is fragile

Côte d'Ivoire 45


The BRVM began trading in September 1998 after many delays, replacing the old Abidjan stock exchange, Bourse des valeurs d!Abidjan. The BRVM serves the eight countries of the West African Franc Zone, Union économique et monétaire ouest-africaine (UEMOA). The bourse has been particularly sensitive to political and economic developments in Côte d!Ivoire, dropping sharply after the 1999 coup and then recovering from late 2001 following the forum of national reconciliation. It fell again in September 2002 following the outbreak of the civil war but recovered towards the end of the year"the BRVM composite index ended 2002 at 74.3, a fall of only 4% compared with the end of 2001 (September 1998=100). Since 2003 the index has slowly recovered, and in 2006 ended the year at 112.7. The privatised Senegalese telecommunications company, Sonatel, is the most important of the 45 companies listed (most of the others are Ivorian) and accounts for a substantial share of day-to-day trading. In one sense the impact of the economic and political crisis in Côte d!Ivoire has been beneficial, in that it has reduced Côte d!Ivoire!s domination of the stock exchange. Ivorian companies had accounted for 73% of its total market capitalisation at the end of 2001, but this had fallen to 59% by the end of 2002.

Other services

The tourism industry remains underdeveloped despite having great potential. The number of tourists visiting Côte d!Ivoire reached 300,000 in 1998 following a government-led promotion campaign, major renovation of international-standard hotels and the arrival of charter companies such as Nouvelles Frontières in the mid-1990s, although the industry has collapsed since then. Hotel and other tourism facilities tend to concentrate around the commercial capital, Abidjan (including its sea resort, Grand-Bassam), and, to a lesser extent, around the administrative capital, Yamoussoukro. There is great scope for tourism development along the country!s 560-km coastline. Away from the beaches there are plans to develop eco-tourism centred on the country!s vanishing tropical forests. The room capacity is estimated at 6,500 for the whole country. The tourism industry has virtually collapsed, however, in the light of the political situation.

Côte d!Ivoire has a large and well-developed commercial sector. Much small-scale retailing and trading is still carried out in the informal sector. Lebanese-run companies are particularly active in wholesale trade. Such business networks also play a role in the export of commercial and consumer goods throughout the region.

The external sector

Trade in goods

Trade patterns, notably exports, remain highly vulnerable to external factors, namely weather conditions and world commodity prices. Historically a single commodity, cocoa has been by far the largest source of foreign-exchange

A regional stock exchange is located in Abidjan

Plans to boost tourism

A well-developed commercial sector

A comfortable trade surplus

46 Côte d'Ivoire


earnings, accounting for up to 40% of total exports in normal years (earnings were unusually low in 2000, owing to a fall in world cocoa prices). The increase in world cocoa prices pushed cocoa (cocoa beans and cocoa products) up to 44.6% of total exports in 2002. However, in recent years the country!s export structure has changed, with the share of cocoa exports falling as a result of increased petroleum products and crude oil exports; this reflects both increased oil production and high international oil prices. As a result, exports of oil and petroleum products passed those of cocoa for the first time in 2005; exports of cocoa beans and products amounted to only 20.3% of total exports, while petroleum products and crude oil exports accounted for 27.7%. The remaining 50% of the country!s export base is relatively well diversified, including (in descending order) processed timber, coffee beans and products, cotton, canned fish, palm oil, textiles and cement. There have been some efforts to add value to the country!s exports by promoting processing activities over the years. Agro-industrial exports (including cocoa and coffee products, palm oil and canned fish) amounted to 15.5% of total exports in 2002 and 12.6% in 2005.

Despite being endowed with some natural resources and having a well-diversified manufacturing base by the standards of Sub-Saharan Africa, Côte d!Ivoire still needs to buy a wide selection of goods from abroad. These include crude oil, petroleum products, industrial raw materials, foodstuffs and beverages, capital equipment, and other consumer goods (including pharmaceutical products). Owing to slow growth and falling investment, demand for imports of capital equipment fell from a peak of CFAfr395.6bn in 1999 to CFAfr239.6bn in 2002. A surge in capital equipment imports in recent years"from CFAfr411.8bn in 2003 to CFAfr967.8bn in 2005"was probably the result of purchases of weaponry and related equipment. Overall, Côte d!Ivoire traditionally runs a large trade surplus, which increased significantly following the devaluation of the CFA franc in 1994. Although cocoa prices fell in 2003-05, the trade surplus remained high, at US$2.4bn in 2005, reflecting higher oil exports.

Although the government wants to diversify the country!s trading partners, the EU still accounts for around two-thirds of Côte d!Ivoire!s total trade. France, the former colonial power, remains the main trading partner, accounting for 27.7% of total imports and for 18.3% of total exports in 2005. Trade links are also strong with Nigeria, which provided 24.5% of the country!s imports (overwhelmingly oil) in 2005, while the US became the second destination for exports (14.1%). The government is seeking to develop closer trade links with the eight-member francophone union, Union économique et monétaire ouest-africaine (UEMOA), of which Côte d!Ivoire is a member. UEMOA has been a customs union since January 2000, when all member countries dropped intra-regional duties and adopted a common external tariff (CET). Plans for a similar customs union exist within the Nigerian-dominated Economic Community of West African States (ECOWAS). However, owing to the civil war and the division of the country, trade with countries in the region, particularly Burkina Faso and Mali, has declined, although there is considerable informal trading across borders.

France is the main trading partner

Côte d'Ivoire 47


Invisibles and the current account

Côte d!Ivoire has traditionally run a current-account deficit. However, in recent years, owing to the strong trade surplus caused by high world cocoa prices, the current account has moved into surplus. It moved from a deficit of US$61.4m in 2001 to a surplus of US$768.2m in 2002 and remained in surplus in 2003 and 2004, although the surplus fell to US$294.2m and US$241m respectively, in line with movements in the trade surplus. In 2005, however, the current-account balance moved back to a deficit of US$12.5m. It is worth noting that there are still substantial problems with the country!s balance-of-payments accounting and difficulties with the compilation of data on invisible inflows and outflows, despite recent efforts to improve the quality of the data.

The bulk of service payments relate to transport, as Côte d!Ivoire is the main transit hub for West Africa. According to the IMF!s Balance of Payments Statistics Yearbook, although freight outflows linked to the import of goods fell substantially between 1999 and 2002, they remained more than ten times higher than the total income earned by Ivorian shippers and carriers. Freight outflows rose significantly in 2003 and 2004, reaching a peak of US$647.5m in 2004. The same applies to other transport and passenger services. Travel, which is an important component of services, has also been in deficit, partly because of low tourist activity in the country. This, combined with government and other services, contributed to a US$1.3bn services deficit in both 2004 and 2005. Debits on the income account fell to US$723m in 2001 but rose again in 2002 and reached US$855m in 2005. Repatriation of profits from foreign companies based in Côte d!Ivoire remained steady, at US$290m in 2004.

Current transfers were also in debit in 2005, by an estimated US$465.3m, owing to the high level of workers! remittances. Outflows of current transfers were over US$500m in the mid-1990s but declined between 1999 and 2001, partly because of lower income on cocoa farms and partly because of the departure of thousands of foreigners after the upsurge in xenophobic attacks. However, they were still substantial in 2001, at an estimated US$399m, more than offsetting aid inflows to the government. From 2002 outflows of current transfers started rising again, and reached US$683m in 2003 and US$654m in 2005 as a result of increased workers! remittances. In addition, flows of overseas development assistance have declined steadily since the mid-1990s, owing to donor concerns over corruption and political unrest. Transfers to the government were worth only US$55.4m in 2003 and US$100,000 in 2005, compared with nearly US$280m in 1995.

Capital flows and foreign debt

Although net foreign direct investment (FDI) rose strongly after the currency devaluation in 1994, from US$78m in 1994 to US$450m in 1997, it fell slowly back to around half this level, totalling US$215m in 2002, according to the UN Conference on Trade and Development (UNCTAD). The bulk of foreign investment (mostly French) in the 1990s was directed towards oil exploration, electricity, telecommunications, export-processing activities (mostly agro-

The current account has been in surplus since 2002

Workers' remittances remain high

FDI falls back in the second half of the 1990s

48 Côte d'Ivoire


industry) and transport. FDI inflows recovered substantially in 2004, to US$283m, as a result of increased investment in the oil sector, but fell back to .US$192m in 2005, according to UNCTAD, owing to the ongoing crisis. Despite the opening in 1998 of a regional stockmarket, Bourse régionale des valeurs mobilières (BRVM), in recent years, portfolio investment has been limited.

Côte d!Ivoire has long suffered from a heavy debt burden owing to the country!s high level of borrowing during the late 1970s and early 1980s. However, loan disbursements have fallen behind principal repayments since 1997, after three years of unusually high external assistance following the 1994 devaluation, and the stock of external debt has declined continuously, from a peak of US$19.5bn in 1996. According to the World Bank!s Global Development Finance, total external debt was US$11.7bn at end-2004, equivalent to 75.8% of GDP. Public and publicly guaranteed external debt (excluding debt to the IMF) accounted for US$9.8bn in 2004, 41% of which was owed to bilateral, official creditors, 35% to multilateral lenders and 24% to commercial lenders. The private sector!s stock of external debt in 2004 remained comparatively small, at US$2.4bn, reflecting Côte d!Ivoire!s limited access to global capital markets.

Côte d!Ivoire has had two major external debt-rescheduling deals since the mid-1990s. The first was made in February 1998 and had two components: one with the London Club of commercial creditors, which, under a complex buy-back arrangement, transformed all commercial debt (US$2.5bn) into bonds; and the other with the Paris Club of official, bilateral creditors, which annulled about 80% of official debt-service commitments, cleared both interest and principal arrears, and reduced the stock of external debt by US$3.9bn. The second, in April 2002, involved the Paris Club restructuring Côte d!Ivoire!s public external debt under so-called Lyon terms. The US$2.3bn deal rescheduled US$1.1bn of principal and interest payment arrears and US$1.2bn of principal and interest payments due to the Paris Club until end-2004. There was also a debt-relief component that immediately cancelled US$911m of debt and reduced debt-service payments. The April 2o02 Paris Club deal and the resumption of relations with the IMF paved the way for Côte d!Ivoire to move into the heavily indebted poor countries (HIPC) debt-relief initiative, which had been suspended in 1999 following the military coup. However, owing to the outbreak of civil war in September 2002, there has been no progress on this front and the country has built up arrears payments with all donors except the IMF. The negotiation of a new debt-rescheduling deal is, therefore, unlikely until the political crisis has been resolved and elections held.

Foreign reserves and the exchange rate

The value of the country!s international reserves (excluding gold) soared from US$2.3m at end-1993 to US$529m in 1995, following the devaluation of the CFA franc. For the next five years the government kept reserves broadly equivalent to two months of imports of goods and services, which is slightly below the level normally considered adequate. However, with cocoa prices picking up in 2000-02, the government was able to build up foreign-exchange reserves to US$1.86bn by the end of 2002. Since 2003 reserves have fluctuated

Debt rescheduling and HIPC forgiveness

Foreign-exchange reserves increase

0

50

100

150

200

250

300

350

1999 2000 01 02 03 04 05

FDI inflows(US$ m)

Source: UNCTAD.

Côte d'Ivoire 49


between US$1.3bn and a peak of US$1.69bn reached at the end of 2004, depending on the country!s export performance and the strength of the euro against the US dollar, which has an impact on their growth in US-dollar terms. By the end of November 2006 reserves had recovered from US$1.3bn at the end of 2005 to US$1.6bn.

In practice, however, Côte d!Ivoire!s level of official reserves is of less significance than in other African countries, since UEMOA member countries pool their foreign currency in the operations account of the regional central bank, Banque centrale des Etats de l!Afrique de l!ouest (BCEAO), held at the French Treasury. In addition, the French Treasury allows the operations account to be in deficit, which guarantees the convertibility of the CFA franc at all times (although the convertibility of the CFA franc has been restricted to physical transactions since 1993 to stem capital flight). In return, all UEMOA countries are required to hold 50% of their foreign assets in the BCEAO operations account (this was 65% until September 25th 2005).

The overvaluation of the CFA franc became a chronic problem for all countries in the Franc Zone in the 1980s. By 1991 the exchange rate in Côte d!Ivoire was thought to be overvalued by perhaps 60%, and free convertibility resulted in growing capital flight. France!s decision that it could no longer defend the CFA franc!s existing value in the face of rising losses by the Treasury and growing pressure for a major devaluation from the IMF and the World Bank made such an event inevitable. The 50% devaluation, to CFAfr100:FFr1, happened on January 12th 1994. There were rumours of a second devaluation with the advent of the EU!s common currency in January 1999, but the CFA franc!s peg remained unchanged at CFAfr655.957:#1. In line with the euro, the CFA franc lost about 20% of its value against the US dollar between 1999 and 2001, averaging CFAfr733:US$1 in 2001. However, the euro and the CFA franc strengthened substantially against the US dollar in the second half of 2002 and in 2003-04. The strengthening of the euro against the US dollar slowed in 2005-06, however, and the CFA franc averaged CFAfr527.5:US1 in 2005 and CFAfr522.9:US$1 in 2006. Despite the strengthening of the CFA franc against the US dollar, the Economist Intelligence Unit believes that the CFA peg will remain in place as a result of strong commodity prices, which will help to maintain a healthy terms of trade ratio among member states, as well as strong political opposition to a devaluation.

The CFA franc is successfully linked to the euro

50 Côte d'Ivoire


Regional overview

Membership of organisations

The African Union (AU) is the successor to the Organisation of African Unity (OAU). The AU is modelled on the EU and has ambitious plans for a parliament, a central bank, a single currency, a court of justice and an investment bank. The most advanced of these is for the Pan-African Parliament, which was inaugurated in March 2004 and has since held a number of sessions, although it is unlikely to play a legislative role for some years. The AU also aims to have common defence, foreign and communications policies, based loosely on those of the EU. Even if these goals are not fulfilled, the organisation fills the need for a forum for discussing the continent!s problems, and the idea of pan-African unity exerts a strong hold over member countries. The day-to-day affairs of the AU are managed by the AU commission, which is modelled on the EU commission. The commission is headed by the former Malian president, Alpha Konaré.

One of the main problems facing the AU is the cost of many of the proposed new institutions and policy co-ordination mechanisms. To help to counter this, at the July 2004 Annual Summit Mr Konaré presented a 2004-07 Strategic Framework for the AU. Under this, member states are supposed to pledge 0.5% of GDP to fund the AU, which would allow it to double the staff at its headquarters and to push ahead with the implementation of the New Partnership for Africa!s Development (Nepad). However, few states have kept to their funding commitments, and the involvement in Nepad remains a bone of contention with the South African government, which is keen for Nepad to remain in its South African headquarters. As such, the AU remains heavily dependent on donor support and the expansion plans remain unimplemented.

The main criticism levelled at the OAU in the last decade was that little real action resulted from its policy announcements. There are concerns that the AU, like its predecessor, will be undermined by a lack of real commitment to its initiatives among the 53 member states, many of which suffer from weak governance. This problem is further compounded by the fact that many member states are unlikely to give up the sovereignty required to make several of the proposed initiatives"such as a single currency or a court of justice"operate effectively. However, on a more positive note, the AU has shown a much greater willingness to overcome opposition to the principle of non-interference. However, its intervention has had a mixed success rate, particularly in Côte d!Ivoire, where little progress has been made, while it has avoided any wider involvement in more contentious political crises, such as that in Zimbabwe.

In 2003 the AU established a Peace and Security Council (PSC) modelled on the UN Security Council. It is envisaged that the PSC will sanction military intervention in member states in cases of genocide, unconstitutional changes of government and gross human rights abuse. The proposed military intervention

African Union (AU)

Côte d'Ivoire 51


by the AU is to be through a standing armed force. This is projected to comprise five battalions by 2010 and will be part of a wider peacekeeping initiative proposed by the group of the word!s eight leading industrialised nations (G8) in 2004, which seeks a commitment to train and, where appropriate, equip some 75,000 troops by 2010 to take part in peace support operations worldwide "with a sustained focus on Africa". The first real test of the PSC to intervene in a conflict arose in 2004. As a result of this, 7,000 troops are now in Sudan, trying to keep the peace in the Darfur region. However, they are chronically under-equipped and are overwhelmed by the sheer size of the mission. Until such issues are fully resolved, quite apart from the political constraints to intervention, it is unlikely that the AU will be able to send an effective peacekeeping force to intervene in such crises.

The Economic Community of West African States (ECOWAS) was established in May 1975 by 15 West African countries: Benin, Burkina Faso, Côte d!Ivoire, The Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Mauritania, Niger, Nigeria, Senegal, Sierra Leone and Togo. Cape Verde joined ECOWAS in 1977, and Mauritania withdrew in early 2000. The community!s principal objective is to establish a customs union and a common market to promote the free movement of goods and people within West Africa. ECOWAS has an executive secretariat headed by a Ghanaian former minister, Mohamed Ibn Chambas, a 120-member parliament and a court of justice, all based in the Nigerian capital, Abuja. Decision-making powers are vested in a council of ministers and a chairman (who is elected annually and is currently Mamadou Tandja of Niger); supreme authority rests with the annual conference of heads of state and government. The ECOWAS Bank for Investment and Development (EDIB), which was set up in 2001, carries out development projects in member states.

In 1994 eight members of ECOWAS"mainly francophone countries"set up the Union économique et monétaire ouest-africaine (UEMOA) to work towards a customs union and other aspects of economic convergence. The UEMOA members"Benin, Burkina Faso, Côte d!Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo"already share the same currency, the CFA franc, and similar legal codes. In December 2000 six other ECOWAS members"The Gambia, Ghana, Guinea, Liberia, Nigeria and Sierra Leone"signed an agreement to create a second regional monetary union, the West African Monetary Zone (WAMZ). This led to the creation of the West African Monetary Institute, an interim organisation that was to pave the way for the creation of a West African central bank and the introduction of a common currency, the Eco, in January 2003, followed by the merger of the two monetary zones in 2004. However, the failure of member countries to meet most of the WAMZ convergence criteria led to the creation of the Eco being postponed until December 2009, although this deadline is also unlikely to be met. Progress towards economic integration in ECOWAS has been limited by several factors, including antagonism towards the core member, Nigeria; mistrust between anglophone and francophone members; lack of financial resources; and regional political instability. Inadequate infrastructure and the

Economic Community of West African States (ECOWAS)

52 Côte d'Ivoire


lack of diversification of the ECOWAS economies have also undermined economic co-operation.

Although ECOWAS was created for economic reasons, it has been most active on regional security issues. The ECOWAS Ceasefire Monitoring Group (Ecomog), which is dominated by Nigerian forces, has been used for peace-enforcement operations in Liberia (1990-97 and 2003), Sierra Leone (1997-99), Guinea-Bissau (1999), the Guinea-Liberia border (2001) and Côte d!Ivoire (2002). ECOWAS plans to turn its peacekeeping force into a permanent stand-by force for deployment in the sub-region. An observation and monitoring centre at the secretariat in Abuja is the hub of a system that has four observation and monitoring zones to prevent and control civil tension and upheaval in West Africa.

The African members of the Franc Zone share a common currency, the CFA franc. Although the CFA franc was created in 1945, the Franc Zone was shaped by post-colonial treaties made in the early 1970s. The 14 African members are divided historically and geographically into two regional groupings, the Communauté économique et monétaire de l!Afrique centrale (CEMAC) and the Union économique et monétaire ouest-africaine (UEMOA). Equatorial Guinea, which joined CEMAC in 1984, and Guinea-Bissau, which joined the UEMOA in March 1997, are the only two African Franc Zone members that are not former French colonies.

The CFA franc is fixed to"and convertible with"the euro, through special arrangements with France. The French Treasury guarantees the full convertibility and stability of the currency issued by the regional central banks"the Banque des Etats de l!Afrique centrale (BEAC; based in Yaoundé, Cameroon) and the Banque centrale des Etats de l!Afrique de l!ouest (BCEAO; based in Dakar, Senegal)"which are in turn required to maintain a minimum of 50% of their reserves in euros with the French Treasury. The stability of the CFA franc is founded on tight monetary and credit discipline, underpinned by two specific safeguard measures: central banks are required to maintain at least a 20% foreign-exchange cover of their sight liabilities and governments are not allowed to draw more than 20% of the previous year!s budget receipts from their regional bank!s central funds.

In January 1994 the CFA franc was devalued for the first time in 46 years, from CFAfr50:FFr1 to CFAfr100:FFr1. With the advent of European economic and monetary union the CFA franc's peg was switched automatically to the euro in January 1999, at a fixed rate of CFAfr655.96:#1. Although there is periodic discussion of a new devaluation, this has come to nothing, reflecting mainly high global commodity prices, which have helped to maintain healthy terms of trade among member states, and the strong political opposition to devaluation.

Comoros has a similar arrangement, having signed a convention with France. The issuing and central bank is the Banque centrale des Comores, and the currency is the Comorian franc (Cfr), with a fixed rate of Cfr491.97:#1.

Franc Zone

Côte d'Ivoire 53


The Cotonou Agreement, signed on June 23rd 2000 in Cotonou, Benin, established a new framework for co-operation over trade and aid between the EU and the 77 members of the African, Caribbean and Pacific (ACP) group of states. It replaced four successive Lomé conventions, the first of which was signed in 1975. The Cotonou Agreement runs until 2020 and is subject to revision every five years. Although similar to the Lomé conventions, the new agreement has a stronger political dimension. Respect for human rights, democratic principles and the rule of law were essential components of the last Lomé convention. Under the Cotonou Agreement, the ACP countries also agree to promote good governance, combat corruption and try to prevent illegal immigration into the EU.

Under the Lomé conventions, the EU granted non-reciprocal trade preferences to the ACP countries. Their goods, whether agricultural or industrial, entered the EU duty free, although four agricultural products"beef, sugar, bananas and rum"were subject to a more restrictive system of tariff quotas. The Cotonou Agreement, on the other hand, envisages a system of separately negotiated regional free-trade agreements known as Economic Partnership Agreements (EPAs), under which the ACP countries, preferably within existing economic groupings, will in return for duty-free access to the EU market gradually open their domestic markets to European products. The EPAs are due to have been negotiated by the end of 2007. However, not all ACP countries will have to open their markets to EU products after 2008. The group of least developed countries (LDCs) will be able to continue under either the Lomé arrangements or the "Everything But Arms" regulation"an EU initiative of 2001, under which all imports into the EU from the LDCs, with the exception of armaments, are duty free and quota free. Non-LDCs that decide that they are unable to enter into an EPA can be transferred into the EU!s generalised system of preferences.

The European Development Fund (EDF) will continue to be the main source of multilateral European aid to the ACP countries. Under the Cotonou Agreement, EDF instruments have been regrouped and rationalised into two programmes: one to provide grants for long-term development schemes being carried out at either the national or the regional level, with additional support available in the event of a fall in export earnings, and the other to finance risk capital and loans to the private sector. The ninth EDF (2000-07) totals #13.5bn (US$12.9bn). In addition, about #10bn left undisbursed from previous EDFs will remain available until 2007, and the European Investment Bank will provide #1.7bn. In December 2005 the European Council established the tenth EDF (2008-13), to which it allocated #22.7bn.

The Union économique et monétaire ouest-africaine (UEMOA) was established in January 1994, two days before the devaluation of the CFA franc, and replaced the Union monétaire ouest-africaine (UMOA), which was founded in 1962. The treaty aims to extend the process of integration between eight West African countries"Benin, Burkina Faso, Côte d!Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo"which are already tied to a common currency, the CFA franc, and a single monetary policy under the aegis of the Banque centrale des Etats

Cotonou Agreement

Union économique et monétaire ouest-africaine

(UEMOA)

54 Côte d'Ivoire


de l!Afrique de l!ouest (BCEAO). In January 2000 a customs union came into force, eliminating duties on produce and manufactured goods traded between member countries and introducing a common external tariff. The UEMOA!s development bank, Banque ouest-africaine de développement (BOAD), is currently implementing a project in support of capital markets and infrastructure integration within the region, supported with US$408m of funding from the World Bank.

The UEMOA has established the following convergence criteria which must be met before full economic union can be achieved: a public-sector wage bill equal to less than 50% of tax revenue; a primary fiscal surplus equivalent to at least 15% of tax revenue; a declining or unchanged level of domestic and external arrears; and the financing of at least 20% of the government!s share of public investment from fiscal receipts. However, progress towards economic convergence has been delayed by ongoing instability in Côte d!Ivoire, the largest economy of the UEMOA, and at the annual heads of state summit in March 2006 it was agreed to postpone the deadline until December 2008.

Côte d'Ivoire 55


Appendices

Sources of information

Because of the conflict, economic statistics have became increasingly difficult to obtain and publications have been suspended, notably the Tableau résumé de l'économie and the Indicateurs conjoncturels. Both were published quarterly by the Ministry of Economy and Finance. The monthly Tableau de bord from the Abidjan-based Institut national de la statistique (INS), which also covers a wide range of macroeconomic indicators, is not available at present either.

As a result, the primary statistical source is the annual report from the regional central bank, Banque centrale des Etats de l!Afrique de l!ouest (BCEAO), in Dakar. The BCEAO!s website, www.bceao.int, carries information on the regional central bank and up-to-date reports published by the Union économique et monétaire ouest-africaine (UEMOA), including the monthly Conjoncture économique dans les pays de l'UEMOA and the monthly Indices harmonisés des prix à la consommation.

Bourse régionale des valeurs mobilières, www.brvm.org, gives statistics on the regional stockmarket.

The principal international sources, such as the IMF!s International Financial Statistics, draw almost exclusively on national sources. The IMF and the World Bank also produce country-specific documents, which contain staff estimates that form the basis for lending decisions by the institutions! directors. Other than the IMF!s International Financial Statistics, the main international sources are: three annual publications from the World Bank, Global Development Finance, African Development Indicators and World Development Report; the OECD!s Geographical Distribution of Financial Flows to Aid Recipients; and the UNDP!s Human Development Report. Another indispensable source, drawn from BCEAO data, is the annual report on the Franc Zone, published by Banque de France in Paris. On the historical national accounts there tend to be differences between the French and regional sources and the World Bank-IMF.

Signaux d'Abidjan (monthly), Mission économique, Ambassade de France, Abidjan

Investir en Zone Franc website, online at www.izf.net, covers news, business information and statistics for all Franc Zone countries

Abidjan portal contains daily news from a variety of sources including Fraternité-matin, Le Jour, Notre voie and Le Patriote (all daily), and useful links, online at www.abidjan.net

M Jarret and F Mahieu, La Côte d'Ivoire de la déstabilisation à la refondation, Harmattan, 2002

F Akindès, Les Racines de la crise politico-militaire en Côte d'Ivoire, Conseil pour le développement de la recherche en sciences sociales en Afrique (CODESRIA), 2004, Dakar, Senegal

National statistical sources

International statistical sources

Select bibliography and websites

56 Côte d'Ivoire


International Crisis Group (ICG), Côte d'Ivoire: Peace as an option (May 2006) and Côte d'Ivoire: Stepping up the pressure (September 2006) Dakar/Brussels, www.crisisweb.org

IMF, Côte d'Ivoire: Statistical Appendix, June 2004

UN mission in Côte d!Ivoire (MINUCI), www.un.org/french/peace/peace/cu_mission/minuci/index.html

Websites for the main political parties are:

Front populaire ivoirien: www.fpi-ci.org

New Forces: www.fnci.info

Parti démocratique de Côte d!Ivoire (PDCI): www.pdcirda.org

Rassemblement des républicains (RDR): www.rdrci.org

Reference tables

Population (m, mid-year estimate)

2001 2002 2003 2004 2005Population 17.1 17.3 17.6 17.9 18.2 % change 2.4 1.2 1.7 1.7 1.6

Source: IMF, International Financial Statistics.

Transport statistics (�000 tonnes unless otherwise stated)

2001 2002 2003 2004 2005Freight (Abidjan & San-Pédro ports) 14,864 16,126 15,507 17,670 18,539 Exports 5,399 6,855 6,960 7,481 8,356 Imports 9,468 9,272 8,546 10,189 10,183

Rail Passengers (�000) 288 224 89 164 n/aFreight 1,009 879 180 569 n/a

Air transport Passengers (�000, incl transit) 1,043 821 773 811 776Freight 20 17 16 14 13

Source: Institut national de la statistique.

Electricity production and consumption ('000 kwh)

2001 2002 2003 2004 2005Net domestic production 4,865 5,276 5,064 5,370 5,532 Hydroelectric 1,792 1,722 1,823 1,740 1,425

Domestic consumption 2,959 2,935 2,693 3,106 3,333Exports 1,156 1,569 1,325 1,420 1,397

Source: Ministère de l'économie et des finances.

Côte d'Ivoire 57


Petroleum production and consumption (m tonnes unless otherwise indicated)

2001 2002 2003 2004 2005Production 3,994.0 2,750.3 2,637.2 3,501.6 3,890.7Consumption 953.5 860.8 766.3 745.7 515.9 Petrol (m cu m) 172.1 144.5 125.5 122.9 133.9 Gas-oil (m cu m) 568.4 506.4 451.5 445.1 502.6 Diesel 21.1 20.4 11.4 12.0 13.3 Fuel oil 53.2 37.7 32.0 22.6 21.6

Source: Ministère de l�économie et des finances.

Government finances (CFAfr bn)

2001 2002 2003 2004 2005a

Total revenue 1,376.6 1,469.5 1,401.2 1,514.1 1,565.8

Taxes 1,168.4 1,259.3 1,189.9 1,241.4 1,251.2

Non-tax revenue 167.9 169.1 161.9 196.8 227.0

Grants 40.3 41.1 49.4 75.9 87.6

Total expenditure & net lendingb 1,306.9 1,584.4 1,608.6 1,665.0 1,704.6

Recurrent expenditure 1,150.2 1,256.9 1,288.8 1,298.0 1,378.2

Salaries 484.1 523.5 539.3 545.8 563.4

Interest payments 259.7 265.6 217.4 186.2 180.5

Foreign 235.7 242.4 191.3 156.7 151.6

Domestic 24.0 23.2 26.1 29.5 28.9

Other recurrent expenditures 402.0 467.8 532.1 566.0 634.3

Capital 147.1 264.3 216.1 258.6 228.3

Externally financed 59.3 111.2 89.1 106.4 94.6

Other expenditure related to the crisis 0.0 57.5 97.0 97.8 77.0

Primary balancec 358.0 291.2 155.8 174.2 146.8

Balance (commitments basis) 69.7 -114.9 -207.4 -150.9 -138.8

Balance (cash basis) 69.7 -114.9 -207.4 -150.9 -138.8

Financing -71.3 130.5 220.3 149.3 139.7

Domestic -83.4 33.7 74.4 26.1 -10.8

External -142.3 96.8 145.9 123.2 150.5

New loans 28.4 255.8 39.3 41.1 7.0

Financing gap -1.6 15.6 12.9 -1.6 0.9

a Estimates. b Net lending was zero in 1999-2000, CFAfr9.6bn in 2001, CFAfr12.9bn in 2002, CFAfr9.1bn in 2003 and CFAfr11.9bn in 2004. c Excluding grants, interest payments and some capital expenditure financed externally.

Source: Banque de France, La Zone franc, Rapport annuel 2005.

Money supply (CFAfr bn unless otherwise indicated; end-period)

2001 2002 2003 2004 2005

Money (M1) incl others 1,324.8 1,750.5 1,145.1 1,300.4 1,397.3

% change, year on year 14.8 32.1 -34.6 13.6 7.5

Quasi-money 515.3 641.1 618.6 632.2 683.9

Money (M2) 1,840.1 2,391.6 1,763.7 1,932.6 2,081.2

% change, year on year 12.0 30.0 -26.3 9.6 7.7


58 Côte d'Ivoire


Interest rates (%; period averages)

2002 2003 2004 2005 2006

Lending interest rate 10.3 10.7 9.5 9.5 9.5

Deposit interest rate 3.5 3.5 3.5 3.5 3.5

Money-market interest rate 6.0 4.5 4.0 4.0 4.3


Gross domestic product (market prices)

2001 2002 2003 2004 2005

Total (US$ m) At current prices 10,554.0 11,482.0 13,734.1 15,481.1 16,172.5

Total (CFAfr bn) At current prices 7,736.5 8,002.9 7,982.3 8,178.5 8,530.5

At constant (1986) prices 6,758.9 6,648.7 6,538.3 6,645.7 6,765.7

% change, year on year 0.1 -1.6 -1.7 1.6 1.8

Per head (CFAfr) At current prices 454 462 454 458 470

At constant (1986) prices 396 383 371 372 373

% change, year on year -1.7 -3.3 -3.1 0.1 0.2

Sources: World Bank; IMF.

Gross domestic product by expenditure (CFAfr bn at current prices)

2001 2002 2003 2004 2005Private consumption 5,297.5 4,695.8 5,241.8 5,468.8 5,918.2 % of total 67.3 58.6 65.7 66.9 70.0

Government consumption 1,100.5 1,290.8 1,093.5 1,128.5 1,068.6 % of total 14.0 16.1 13.7 13.8 12.6

Gross fixed investment 858.8 728.4 811.8 863.8 875.9 % of total 10.9 9.1 10.2 10.6 10.4Exports of goods & services 3,316.0 4,084.4 3,749.6 4,058.3 4,372.2 % of total 42.1 51.0 47.0 49.6 51.7Imports of goods & services 2,703.3 2,788.3 2,912.4 3,340.9 3,784.2 % of total -34.4 -34.8 -36.5 -40.8 -44.8

GDP 7,869.5 8,011.1 7,984.3 8,178.5 8,450.7

Source: Banque de France, La Zone franc, Rapport annuel 2005.

Prices (% change, year on year)

2001 2002 2003 2004 2005

Consumer prices (av) 4.3 3.1 3.3 1.4 4.0


Côte d'Ivoire 59


Production of main cash crops (�000 tonnes)

2001/02 2002/03 2003/04 2004/05 2005/06Cocoa 1,264.7 1,351.5 1,407.2 1,286.3 1,407.8Coffee 215.7 188.7 161.3 139.7 130.0

Cotton (seed) 393.0 396.1 180.1 327.1 230.0

Sources: International Cocoa Organisation; International Coffee Organisation; and Banque centrale des Etats de l'Afrique de

l'ouest.

Gold, oil and gas production 2001 2002 2003 2004 2005Gold (kg) 3,672 3,570 1,313 1,272 1,637Oil ('000 barrels) 2,099 5,457 7,506 7,952 14,566

Natural gas (BTUa bn) 38,602 53,196 55,618 55,936 61,555

a British Thermal Unit.


Manufacturing production (1984/85=100 unless otherwise indicated; seasonally adjusted)

2001 2002 2003 2004 2005Petroleum & mineral extraction 32.3 57.5 100.5 104.0 115.5 % change -67.9 78.0 74.8 3.5 11.1

Electricity & water 247.5 267.3 255.8 268.0 283.8 % change 2.1 8.0 -4.3 4.8 5.9Textiles & clothing 109.5 83.5 61.8 66.3 40.5 % change -9.0 -23.7 -26.0 7.3 -38.9Agro-industry 139.3 116.3 92.5 94.3 98.5 % change 0.4 -16.5 -20.5 1.9 4.5

Construction materials 174.3 191.3 149.8 188.0 193.0 % change -14.7 9.8 -21.7 25.5 2.7

Timber 71.0 68.0 70.3 52.5 38.4 % change 3.6 -4.2 3.4 -25.3 -26.9Total manufacturing 136.0 119.8 104.3 106.8 114.5 % change -2.9 -11.9 -12.9 2.4 7.2Total industry (excl mining) 152.3 141.5 126.5 130.3 139.3 % change -2.1 -7.1 -10.6 3.0 6.9

Total industry 135.5 129.5 122.8 126.8 136.0 % change -3.1 -4.4 -5.2 3.3 7.3


Construction statistics ('000 tonnes unless otherwise indicated)

2001 2002 2003 2004 2005Production indicator (1985=100) 136.5 149.0 136.0 138.5 174.8 % change -17.4 9.2 -8.7 1.8 26.2

Clinker imports 1,181.8 1,201.5 719.7 1,036.0 926.3Cement exports 649.6 605.8 209.8 458.4 449.7


60 Côte d'Ivoire


Stockmarket indicatorsa (end-period unless otherwise indicated)

2002 2003 2004 2005 2006No. of listed companies 38 38 39 37 37Market capitalisation (CFAfr bn) 830.2 858.1 1,005.0 1,297.1 2,067.0

BRVM-10b 82.4 88.3 102.7 149.9 130.9BRVM Compositec 74.2 76.5 87.6 112.7 112.7

a On September 16th 1998 the Abidjan Stock Exchange (ASE) was replaced by the regional stock exchange, Bourse régionale des valeurs mobilières (BRVM). b The BRVM-10 is an index of the ten most active shares. c The BRVM Composite is the index of all shares quoted on the BRVM (September 1998=100).

Sources: Bourse régionale des valeurs mobilières; Standard & Poor's, Emerging Stock Markets Review.

Main composition of trade (US$ m)

2001 2002 2003 2004 2005

Exports fob Cocoa 1,308.5 2,256.8 2,362.4 2,171.3 2,060.8

Fuel products 513.1 689.7 702.7 1,212.1 2,010.7

Timber 248.1 223.8 235.5 304.8 299.5

Coffee 142.0 119.1 142.8 131.1 113.8

Total exports incl others 3,945.9 5,274.8 5,787.7 6,919.3 7,488.3

Imports cif Capital equipment & raw materials 974.0 950.3 1,177.2 1,978.7 2,470.7

Others 489.1 504.7 672.2 875.5 950.2

Food, beverages & tobacco 542.7 594.6 774.8 819.2 866.0

Fuel 540.3 417.5 535.4 1,034.7 1,586.1

Total imports incl others 2,418.0 2,456.0 3,231.1 4,168.0 4,689.9

Source: Direction générale des douanes.

Main trading partners (% of total)

2001 2002 2003 2004 2005

Exports fob to: France 13.1 12.5 19.0 23.7 18.3

US 7.0 7.6 7.1 10.2 14.1

Netherlands 13.1 19.0 17.7 10.8 11.0

Nigeria 1.3 9.4 3.0 7.5 8.0

Imports cif from: France 19.2 21.5 32.0 32.7 27.7

Nigeria 17.1 14.1 14.2 20.3 24.5

Singapore 0.1 5.4 0.2 0.1 6.6

China 2.7 2.4 3.4 2.8 3.1

Source: IMF, Direction of Trade Statistics Yearbook.

Côte d'Ivoire 61


Balance of payments, IMF series (US$ m)

2001 2002 2003 2004 2005

Goods: exports fob 3,945.9 5,274.8 5,787.7 6,919.3 7,488.3

Goods: imports fob -2,417.8 -2,455.6 -3,230.9 -4,291.4 -5,094.1

Trade balance 1,528.1 2,819.2 2,556.8 2,627.9 2,394.2

Services: credit 577.8 585.3 664.0 762.8 801.2

Services: debit -1,271.3 -1,544.7 -1,780.2 -2,032.7 -2,080.2

Income: credit 137.3 141.2 170.6 189.7 192.3

Income: debit -723.1 -770.9 -830.1 -841.3 -854.7

Current transfers: credit 88.5 131.9 196.4 187.4 189.1

Current transfers: debit -398.7 -593.8 -683.3 -652.8 -654.4

Current-account balance -61.4 768.2 294.2 241.0 -12.5

Direct investment in Côte d'Ivoire 272.7 212.6 165.3 283.0 265.7

Direct investment abroad -5.0 -4.0 23.0 -26.0 -4.0

Inward portfolio investment) -12.0 -21.1 -33.8 -37.5 -43.5

Outward portfolio investment 4.0 51.7 67.0 19.1 35.3

Other investment assets -129.1 -439.0 -341.7 -402.5 -415.1

Other investment liabilities -197.8 -828.6 -886.9 -778.0 -894.3

Financial balance -67.2 -1,028.4 -1,007.1 -941.9 -1,055.9

Capital account nie credit 11.5 9.1 14.1 146.4 181.5

Capital account nie debit -1.4 -0.8 -0.4 -0.5 -0.8

Capital account nie balance 10.0 8.3 13.7 145.9 180.7

Net errors & omissions 31.2 -26.3 -887.9 16.4 20.8

Overall balance -86.1 -278.4 -1,615.3 -508.5 -862.6

Financing (a minus sign indicates inflow) Movement of reserves -351.1 -844.3 559.4 -389.7 372.0

Use of IMF credit & loans 0.0 75.8 0.0 0.0 0.0


62 Côte d'Ivoire


Net official development assistancea (US$ m)

2000 2001 2002 2003 2004Bilateral 250.1 158.5 831.1 281.2 196.0 France 156.3 110.4 531.3 116.5 62.2 Italy 0.2 0.3 0.3 0.7 49.7 US 10.0 2.0 53.1 62.6 31.8 Germany 15.7 19.0 31.1 54.4 14.5 Belgium 13.9 2.5 44.4 4.7 7.8

Multilateral 101.2 10.8 237.2 -29.3 -42.9 IDA 75.4 5.0 161.2 43.7 33.1 EC 3.0 71.8 5.0 6.5 22.7 UNHCR 7.7 8.1 6.2 8.2 10.5 UNDP 1.3 1.7 2.5 4.4 4.9 IMF -39.3 -84.9 -10.6 -104.9 -126.7Total 351.8 169.6 1,068.8 252.5 153.6 Grants 311.3 285.4 750.7 360.5 294.3

a Disbursements minus repayments. Official development assistance is defined as grants and loans with at least a 25% grant element, provided by OECD and OPEC member countries and multilateral agencies and administered with the aim of promoting development and welfare in the recipient country. Aid from the former Soviet bloc is excluded.

Source: OECD, Geographical Distribution of Financial Flows to Aid Recipients.

External debt, World Bank series (US$ m unless otherwise indicated; debt stocks as at year-end)

2000 2001 2002 2003 2004

Public medium- & long-term 9,063.4 8,602.7 9,110.2 9,700.5 9,827.6

Private medium- & long-term 1,482.3 1,372.3 1,258.7 1,143.7 1,009.7

Total medium- & long-term debt 10,545.7 9,975.0 10,368.9 10,844.2 10,837.3

Official creditors 6,669.3 6,210.8 6,752.1 7,341.1 7,467.3

Bilateral 3,710.9 3,452.6 3,712.4 4,051.7 4,018.4

Multilateral 2,958.4 2,758.2 3,039.7 3,289.4 3,448.9

Private creditors 3,876.4 3,764.2 3,616.8 3,503.1 3,370.0

Short-term debt 1,042.9 1,179.1 931.6 917.4 590.7

Interest arrears 78.6 375.9 267.3 359.4 483.0

Use of IMF credit 549.3 464.0 490.9 425.0 311.4

Total external debt 12,137.9 11,618.1 11,791.4 12,186.6 11,739.4

Principal repayments 481.4 369.2 522.4 430.5 442.4

Interest payments 538.9 251.6 309.0 141.8 100.2

Short-term debt 74.1 33.6 26.4 18.3 10.0

Total debt service 1,020.3 620.8 831.4 572.3 542.6

Ratios (%) Total external debt/GDP 116.4 110.1 102.7 88.7 75.8

Debt-service ratio, paida 22.2 13.1 13.6 8.5 6.8

Note. Long-term debt is defined as having original maturity of more than one year.

a Debt service as a percentage of earnings from exports of goods and services.

Source: World Bank, Global Development Finance.

Côte d'Ivoire 63


Foreign reserves (US$ m; end-period)

2001 2002 2003 2004 2005

Total reserves incl gold 1,019.0 1,863.3 1,303.9 1,693.6 1,321.6

International reserves excl gold 1,019.0 1,863.3 1,303.9 1,693.6 1,321.6

Gold, national valuation 0.0 0.0 0.0 0.0 0.0


Exchange rates (CFAfr per unit of currency unless otherwise indicated; annual averages)

2002 2003 2004 2005 2006

US$ 697.0 581.2 528.3 527.5 522.9

£ 1,044.6 948.9 967.2 959.0 965.2

N 5.78 4.50 3.98 4.02 4.11

R 66.3 76.9 81.9 82.9 77.3

� 658.6 658.1 657.1 656.6 656.3

¥ 5.56 5.01 4.88 4.79 4.50


Editors: Juliette Grundman (editor); David Cowan (consulting editor) Editorial closing date: February 19th 2007 All queries: Tel: (44.20) 7576 8000 E-mail: [email protected]

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