Côte D'ivoire

Country Profile 2006

Côte d'Ivoire

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Comparative economic indicators, 2005

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Contents

Côte d'Ivoire

3 Basic data

4 Politics 4 Political background 7 Recent political developments 13 Constitution, institutions and administration 15 Political forces 19 International relations and defence

23 Resources and infrastructure 23 Population 25 Education 26 Health 26 Natural resources and the environment 27 Transport, communications and the Internet 30 Energy provision

31 The economy 31 Economic structure 32 Economic policy 35 Economic performance 36 Regional trends

36 Economic sectors 36 Agriculture 40 Mining and semi-processing 41 Manufacturing 42 Construction 43 Financial services 44 Other services

44 The external sector 44 Tra d e i n go od s 45 Invisibles and the current account 46 Capital flows and foreign debt 47 Foreign reserves and the exchange rate

49 Regional overview 49 Membership of organisations

56 Appendices 56 Sources of information 57 Reference tables 57 Population 57 Transport statistics 57 Electricity production and consumption 58 Petroleum production and consumption

58 Government finances 59 Money, credit and interest rates 59 Gross domestic product 59 Gross domestic product by expenditure 59 Consumer price inflation 60 Food crop production 60 Production of main cash crops 60 Gold, oil and gas production 61 Manufacturing production 61 Construction statistics 61 Stockmarket indicators 62 Exports (fob) 62 Imports (cif) 63 Main trading partners 64 Balance of payments, IMF series 65 Net official development assistance 66 External debt, World Bank estimates 66 Reserves 67 Exchange rates

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Côte d'Ivoire

Basic data

Land area 322,463 sq km

Population 17.9m (mid-2004; IMF estimate)

Main towns Population in '000 (at the 1998 census) Abidjan 2,878 Bouaké 462 Yamoussoukro 299 Daloa 173

Climate Tropical

Weather in Abidjan Hottest months, February-April, 24-32°C (average daily minimum and (altitude 20 metres) maximum); coldest month, August, 22-28°C; driest month, January, 41 mm average rainfall; wettest month, June, 495 mm average rainfall

Languages French, Dioula, Baoulé, Bété and other local languages

Measures Metric system

Currency CFA franc; fixed to the euro at a rate of CFAfr656:€1. Average exchange rate in 2005: CFAfr527.5:US$1; exchange rate on February 16th 2006, CFAfr557.5:US$1

Financial year January-December

Time GMT

Public holidays in 2006 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): Tabaski (January 10th, December 31st), Prophet's birthday (April 11th), Easter Monday (April 17th), Ascension Day (May 25th), Whit Monday (June 5th), Eid Al Fitr (October 24th)

Politics

No quick end to the crisis Once considered one of the most stable countries in Sub-Saharan Africa, Côte

in sight d'Ivoire has experienced a rapid collapse of political order since 1999, degenerating into civil war in September 2002. The main political parties signed the Marcoussis peace accord in January 2003 and a national reconciliation government was installed in March 2003. However, it functioned only sporadically, with various opposition parties suspending their participation for long periods of time. By the end of October 2005, when the presidential election, which was originally supposed to have concluded the peace process, had been scheduled (although it was eventually postponed), little of the accord had been implemented owing to disagreements over the interpretation of the reform agenda and the lack of trust between the president, Laurent Gbagbo, and his supporters and the political opposition and former rebels, known as the New Forces, which have controlled the northern half of the country since the start of the civil war. Faced with the prospect of a constitutional vacuum, the international community stepped up its involvement, and in October 2005 the UN Security Council, on the recommendation of the African Union (AU), extended Mr Gbagbo's mandate for a year and required the designation of a new prime minister with extensive executive authority. Charles Konan Banny, the former governor of the regional central bank, was eventually selected after an acrimonious process. He has formed a new government of national unity, but this also faces foot-dragging by the presidential camp and enormous practical and political challenges. Although elections are supposed to take place by October 2006, meeting that deadline will require overcoming the same obstacles that have proved intractable so far, leaving the prospects for a final resolution of the crisis unclear.

Political background

Félix Houphouët-Boigny rules Côte d'Ivoire became independent in August 1960, with the francophile Félix fo r 35 years 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, the 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

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workers on cocoa and coffee plantations. Many settled in Abidjan and in the fertile farming regions in the centre of the country.

A turbulent fin de régime 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 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 parliament 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.

Henri Konan Bédié takes over 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, the 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, parliament 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 strengthened the powers of the president and sought 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 stopped financial support for the government, owing to growing concerns about fraud and corruption.

A coup installs On December 24th 1999 Mr Bédié was overthrown in a bloodless coup, which General Robert Gueï was generally greeted with relief by the population and political parties. The coup was led by a group of young army mutineers headed by General Robert Gueï. He 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.

Mr Gbagbo has a difficult General Gueï's attempt to claim victory over Mr Gbagbo in what was obviously mandate 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, Oct 2000 Votes % of total Laurent Gbagbo (Front populaire ivoirien) 1,062,597 51.9 Robert Gueï (independent) 587,267 28.7 Francis Wodié (Parti ivoirien des travailleurs) 102,253 5.0 Theodore Eg Mel (Union démocratique et citoyenne) 26,331 1.3 Nicolas Dioulo (independent) 13,558 0.7 Invalid ballot papers 254,012 12.4 Total 2,046,018 100.0 Registered voters - 5,475,143 Voter 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 most seats in the legislative elections, a total of 98, 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 also took up some ministerial posts along with the Parti ivoirien du travail (PIT) and some independents.

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Legislative election results (seats) Oct 1995 Dec 2000-Jan 2001 Front populaire ivoirien (FPI) 13 96 Parti démocratique de Côte d'Ivoire (PDCI) 149 98 Parti ivoirien des travailleurs (PIT) 0 4 Mouvement des forces d'avenir (MFA) – 1 Union démocratique et citoyenne (UDCY) – 1 Rassemblement démocratique des républicains (RDR) 13 5 Independents 0 18 Unallocated 0 2 Total 175 225 Voter turnout (%) n/a 31.59

Source: Economist Intelligence Unit.

Reconciliation seemed to be Developments in 2001 seemed to presage a reconciliation, starting with local progressing well 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 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 on 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

A mutiny spirals into civil war 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.

France breaks the stalemate Inconclusive peace negotiations at the end of 2002, under the auspices of the after ECOWAS fails to do so 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. Fearing an escalation of the crisis, 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 UN secretary-general, Kofi Annan. Seydou Diarra, an elder statesmen 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. Resumption of political and financial support was made contingent on compliance with the accord. Prospects for the implementation of the Marcoussis Accord were quickly undermined by resistance from Mr Gbagbo and controversy over the distribution of portfolios in the new government. A series of further negotiations took place in Accra (Ghana), at which Mr Gbagbo extracted further concessions, notably that the holders of the defence and security portfolios should be appointed by committee. The remainder of the portfolios were distributed more or less evenly to the FPI, the PDCI, the RDR and the MPCI. The government convened in early April 2003 only for new difficulties to emerge. The presidency sought to control opposition ministers by directly appointing their powerful permanent secretaries. Stand-offs 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 including 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.

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The government shambles Lack of progress on key aspects of the Marcoussis Accord resulted in the from crisis to crisis government shambling from crisis to crisis. In September 2003 the rebel coalition, known as the New Forces, suspended its participation in the government. It rejoined the coalition in January 2004, but Mr Gbagbo began to demand that the Marcoussis reforms be subject to a referendum. By March the disarmament and reform process was badly stalled again, and in April the PDCI suspended its participation in the government to protest at obstructionism and alleged corrupt practices by the FPI. The suspension also followed violent clashes that left at least 120 people dead following a planned march against Mr Gbagbo that was forbidden by the authorities. The impasse intensified when six other parties, namely the RDR, the UDPCI, the MFA, the MPCI, the MPIGO and the MJP, decided to join the PDCI and formed a new coalition, known as the G7, with the stated objective of ensuring the full and effective implementation of the Marcoussis and Accra Accords. In May the G7 ceased dialogue when Mr Gbagbo issued a decree firing three ministers from the opposition. All parties gathered for a summit with regional heads of state in Accra in late July, where they recommitted to the Marcoussis process; Mr Gbagbo agreed to push the key elements of the agenda through a special session of parliament within a two-month period, and the New Forces agreed to begin disarming once this was achieved. However, this too resulted in no material progress, as the special session became bogged down in attempts by the FPI majority to diminish the scope of reforms or scuttle them altogether. The session concluded fruitlessly and the new date for starting the disarmament process, October 15th, was not honoured, with each side blaming the other for breaking its promises.

The ceasefire is broken The crisis escalated in November 2004 when "young patriot" militias ransacked the offices of pro-opposition newspapers; the next day the national military, known as the Forces armées nationales de Côte d'Ivoire (FANCI), bombarded Bouaké, the country's second city and the New Forces' military headquarters, and soldiers and "young patriots" confronted peacekeepers in the demilitarised zone. After two days of bombardments a FANCI aircraft shot at a French peacekeeping post in Bouaké, killing eight French soldiers and a US civilian. In retaliation France bombed and disabled FANCI's entire air-strike capability, consisting of several fighter jets and combat helicopters. This set off four days of violent anti-French demonstrations in Abidjan by the "patriot" militias, with no police intervention to contain them. French residences and businesses were ransacked, while French troops dispatched to the city fired shots into a crowd, killing several under disputed circumstances. The French government subsequently airlifted several thousand of its nationals and their families out of the country.

An arms embargo is imposed 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. Mr Gbagbo responded that he would ensure the passage of the constitutional amendment governing eligibility conditions. However, once parliament passed the amendment in December, 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.

Thabo Mbeki brokers a new The rising concern of the international community also resulted in the

peace summit consolidation of numerous mediation efforts to the South African president, Thabo Mbeki, who acted on behalf of the AU. However, the deadlock persisted owing to Mr Gbagbo's referendum demand and a number of other procedural disputes, including one on the composition and functioning of the national election commission. Facing an impasse, Mr Mbeki convened Mr Gbagbo, the leaders of the opposition parties and the head of the New Forces, Guillaume Soro, to a summit in Pretoria in early April, at which he personally brokered a new agreement over several nights of talks. The main outcome of these was a decision that each party be able to present the candidate of its 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 two-week delay Mr Gbagbo finally announced this measure, but also said 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 ended the rivalry between their leaders and signed an alliance in Paris under the name Rassemblement des Houphouëtistes pour la démocratie et la paix (RHDP), using the reference to Mr Houphouët-Boigny as the basis for solidarity and to separate themselves from the FPI.

Start of disarmament fails Prospects for any further progress under the Pretoria agreement dimmed when an army campaign in May to begin disarming pro-government militias in the west proved to be an utter failure. Making matters worse, a massacre of villagers in the west took place on May 31st, in a raid that Mr Gbagbo blamed on the New Forces and the opposition blamed on pro-government militias. 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 latest disarmament timetable lapsed in late June, renewing the deadlock and leading Mr Mbeki to convene another summit in Pretoria on June 27th-28th. In keeping with previous patterns, this summit produced another statement of good intentions by all parties, including a renewed commitment by Mr Gbagbo to have the slate of Marcoussis/Accra reforms passed by parliament, and contingent commitments by both sides to relaunch disarmament on a timetable stretching from August to October. In mid-July Mr Gbagbo invoked Article 48 to take a series of measures ostensibly in preparation for the election; the opposition quickly objected to items concerning the composition of the election commission and the criteria for determining nationality and establishing voter rolls, long-time points of contention. Mr Gbagbo sought to press his advantage

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by announcing that elections would be held on schedule, presenting himself as the advocate of peace. This backfired, however, as the G7 repudiated Mr Mbeki's mediation in August, calling him biased and demanding that the AU designate a new mediator.

Elections cannot be held as In September it became obvious that elections could not be held as scheduled;

scheduled Mr Gbagbo confirmed this in a speech postponing them with no new date. International involvement intensified to stave off the onset of a constitutional crisis in which Mr Gbagbo would seek to keep office while the opposition considered him illegitimate. The Nigerian president, Olusegun Obasanjo, stepped into the discussions in his capacity as head of ECOWAS, effectively working in tandem with Mr Mbeki and restoring a degree of opposition confidence. On private recommendations from ECOWAS, the AU passed a resolution on October 6th, which the UN Security Council quickly endorsed on October 13th. The measures extended Mr Gbagbo's mandate for up to one year, until elections are held, and required the nomination of a new prime minister with extensive executive authority to implement the peace agenda that had been repeatedly agreed upon and prepare elections. An International Working Group (IWG) was also formed, to provide reinforced oversight of the peace process. Although the UN asked that the prime minister be named by October 31st, it took weeks longer for Mr Obasanjo and Mr Mbeki to find an acceptable candidate. In late November, the governor of the regional central bank, Banque centrale des Etats de l'Afrique de l'ouest (BCEAO), Charles Konan Banny, was announced as prime minister, and began forming a power-sharing government. After lengthy negotiations the new government was announced in late December. Mr Banny retained the two strategic posts of finance, formerly held by the FPI, and communications, formerly held by the New Forces, entrusting them to junior ministers reporting to him; other positions were distributed more or less evenly among the FPI, PDCI, RDR, New Forces and minor parties.

The new government faces its The new government immediately faced its first crisis in January 2006,

first crisis however, when the IWG recommended the dissolution of the National Assembly—its mandate had expired in mid-December. This was dominated by the FPI and its allies, and Mr Gbagbo had used it on multiple occasions to alter the text of new laws required by the peace process in ways that impaired or cancelled out their effectiveness. After the IWG's recommendation, the FPI announced that it was pulling out of the government and the entire peace process; the pro-government press levied accusations of colonial interference and "young patriots" held four days of demonstrations, paralysing Abidjan and other southern cities with no attempt by the police or the army to stop them. After this show of force Mr Gbagbo finally called for calm, with Mr Obasanjo subsequently clarifying that the working group had not dissolved the assembly, nor had it any power to do so, and the FPI rejoined the government. The issue of the extension of the National Assembly's mandate has yet to be resolved, however, with Mr Gbagbo having decreed unilaterally in late January that its mandate should be prolonged.

Although the recent intervention by the international community, resulting in the formation of Mr Banny's transitional government, represents a significant change in the political landscape, the pattern of events suggests that achieving acceptable elections by the new deadline of October 2006 will be a major practical and political challenge, particularly since there has been little or no progress on disarmament and on the Marcoussis reform agenda, while the passage of time has created increasing entrenchment of vested interests on all sides in the prolongation of the status quo. As a result, although the prospect of renewed military conflict has been staved off, there is little concrete evidence that Mr Banny will succeed in his mission and that Côte d'Ivoire will exit its political and military stalemate in 2006. The Ivorian crisis: important recent events

September-December 2002 A military mutiny is put down in Abidjan but spreads in the north, spawning a new rebel movement, the Mouvement patriotique de Côte d'Ivoire (MPCI). In October a ceasefire, enforced by France, divides the country into northern and southern halves. January-September 2003 A peace accord is reached on January 25th in France and endorsed by the African and international communities. Seydou Diarra is appointed as the prime minister in charge of forming a government of national reconciliation. January–April 2004 The Parti démocratique de Côte d'Ivoire (PDCI) and six other opposition and rebel parties form a coalition, the G7. May-July 2004 The president, Laurent Gbagbo, issues a decree firing three opposition ministers, including Guillaume Soro, the head of the former rebels, known as the New Forces. The New Forces are called back to Bouaké. All parties meet at an international summit in Accra, Ghana, and recommit themselves to the peace process. November 2004 Government forces bombard Bouaké. The UN Security Council imposes an arms embargo and the South African president, Thabo Mbeki, is chosen as the crisis mediator. April 2005 Mr Mbeki convenes a summit in Pretoria, South Africa. Mr Gbagbo agrees to use emergency powers to allow all parties to field presidential candidates, thus permitting Alassane Ouattara, the leader of the Rassemblement démocratique des républicains (RDR) and former prime minister, to run. May-June 2005 The PDCI and the RDR form an alliance, the Rassemblement des Houphouëtistes pour la démocratie et la paix (RHDP). Disarmament deadlines lapse.

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July-August 2005 From hiding, Colonel Jules Yao Yao (demoted in June 2005) and the former chief of staff, Mathias 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 and the peace process threatens to collapse. September-October 2005 Mr Gbagbo officially postpones elections. The UN Security Council endorses African Union (AU) emergency measures for Côte d'Ivoire, including the extension of Mr Gbagbo's mandate for up to one year. The Nigerian president, Olusegun Obasanjo, and Mr Mbeki begin consultations to designate a new prime minister. November-December 2005 The mediators eventually designate the governor of the regional central bank, Banque centrale des Etats de l'Afrique de l'ouest (BCEAO), Charles Konan Banny, as prime minister. The term of the National Assembly lapses. 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 recommends the dissolution of parliament, sparking a crisis in which the Front populaire ivoirien (FPI; the party of the president) announces that it is pulling out of the peace process. Following Mr Obasanjo's mediation 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.

Constitution, institutions and administration

The constitution is changed 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 one-year extension 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 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. A powerful presidency 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.

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Public administration is Heavy red tape pervades public administration, making it sometimes slow and plagued by problems 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 administration 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 stabilisation 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, although usually brief, protests and strikes. During the height of the military conflict in 2002 and early 2003, public administration was affected by the curfew which 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 which 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

The FPI is sharing power but Founded in 1982 by the current president, Mr Gbagbo, the nominally socialist controls back channels 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 seats. 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 popular suburb, 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.

The PDCI seeks a revival 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 the administrative capital, Yamoussoukro, and Bouaké. The PDCI's historic strength in other regions, notably 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 party in 2002. Despite the presence of several rival currents, 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 has become a key The RDR was formed in June 1994 by dissidents from the ruling PDCI who political actor 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.

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The former rebels are not an One result of the civil war is the emergence and conversion to politics of armed official political party 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 government 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 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 across the border to Burkina Faso and Mali. The other two rebel groups, the MJP and MPIGO, are confined to the west and are smaller, less well organised and less popular than the MPCI.

The "young patriots" 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 as a leader 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 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. 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.

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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

Foreign ties had been Whereas General Gueï's attempt to remain in power undemocratically was improving strongly condemned, Mr Gbagbo's claim to victory in the 2000 presidential election at first received a mixed reception. The Organisation of African Unity (OAU), 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 crisis in September 2002 resulted in the suspension of external aid flows pending a political breakthrough, with the exception of some limited humanitarian programmes.

The civil war draws in the Mr Gbagbo's government had more trouble building trust with its neighbours. whole region 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 at least as a sort of rear base, exacerbated the conflict between Abidjan and Ouagadougou. Mr Gbagbo's government considered the rebellion 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.

Difficult regional mediation in When the new crisis emerged in 2002, initial regional attempts to mediate the early stage of the crisis suffered from political rivalries, 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 previous several years—to force the parties to negotiate. The presence at the Paris summit in January 2003 of influential African heads of state, including Thabo Mbeki of South Africa, Omar Bongo of

Gabon, Abdoulaye Wade of Senegal and John Kufuor of Ghana, along with the UN secretary-general, Kofi Annan, testified to the regional concern over Côte d'Ivoire's stability. A similar group was present at the Accra summit in July 2004.

Regional and international After the violent events of November 2004 the response of the regional and stance is unanimous 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 deemed to be posing obstacles to the peace process, so that they may be sanctioned by freezing their overseas assets and banning them from international travel. During much of 2005 these individual measures were suspended while Mr Mbeki carried out his mediation with the support of the international community. When Mr Mbeki's mediation faltered in August, Mr Obasanjo reasserted his role while working together tandem with Mr Mbeki, thus allowing the continued presentation of a united African front while speaking with one voice at the AU and the UN. The swift passage of AU and UN resolutions in October, and the implementation of their principal components, attests to the cohesiveness of the international response at this stage in the crisis. In February 2006, however, financial and travel sanctions were eventually imposed on three protagonists in the conflict, including the leader of the "young patriots", Mr Blé Goudé.

Peacekeeping forces will These developments represent a considerable intensification of international remain in Côte d'Ivoire involvement in Côte d'Ivoire and suggest 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 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 secure the main north-south commercial axis. For several months, the French argued that the UN, which had already given its endorsement to the French and West African presence, should deploy an official peacekeeping force in Côte d'Ivoire under a Security Council mandate. In February 2004, a "blue helmet" force of 6,240 was finally agreed and placed under command of a Senegalese general. Under a Security Council resolution passed in April 2004, this force, known as Opération des nations unie 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 December 15th 2006.

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Relations with France are a Relations with France have long been a crucial component of Ivorian crucial component 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 death 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. 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 heavy role played by major French firms in energy and infrastructure.

The military needs re- Historically the Ivorian government has invested less in the army than in the integration and re-investment 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 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, as well as having 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 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 17,050 Militia 1,500 Reserves 10,000 French forces 3,800 UN 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 armed conflict is significant, as made clear by periodic skirmishes and the attempted 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. Nevertheless, the government in particular has given signs that it considers the military option an acceptable exit strategy, and this view has adherents among the New Forces as well. 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

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appears that elections are unlikely to be held by the new deadline of October 2006, 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, most recently, UN representations. 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. Resources and infrastructure

Population

A multi-ethnic population There are more than 50 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 November 2004 clashes and violent anti-French demonstrations. There is also a substantial Lebanese community engaged mainly in trade.

Demographic pressures Côte d'Ivoire's population profile is that of a young country—an estimated 42% of the population is less than 15 years old. According to the IMF, the country's population was 17.9m in 2004. 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 only 1.7% in 2003-15. Population density is moderate, with an estimated 46 inhabitants per sq km in 1999, compared with 133 per sq km in Nigeria and 81 per sq km 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. Côte d'Ivoire has also become one of the most urbanised countries in West Africa; an estimated 44.9% 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 in the past couple of years, owing to the mass arrival of people displaced from rebel-held areas. It is estimated to have reached almost 4m in recent years.

A poor quality of life for In its 2005 Human Development Report, the UN Development Programme the majority (UNDP) ranked Côte d'Ivoire 163rd out of 177 countries in terms of human development. Real GDP per head was US$816 in 2003 according to the UNDP. GDP per head Although this is a high level for the region, poverty is still a problem. The 1994 (US$) devaluation of the CFA franc benefited rural areas, but the purchasing power of 1,000 urban dwellers, particularly civil servants, was significantly curtailed, and the 900 Franc Zone proportion of poor households in Abidjan increased from 4.8% in 1993 to 20.1% 800 in 1995. Low inflation and strong economic recovery from 1995 helped to boost 700 income per head until 1999-2002, when political instability undermined the 600 economy leading to a decline in real GDP in 2000-02. A 2003 estimate by the 500 World Bank placed 37% of households under the poverty line, up from 32% in 400 1993. Social services have also deteriorated owing to a lack of funding, which is 300 200 confirmed by the latest UNDP indices for education and life expectancy. 100 According to the UNDP, in 2003 only 48.1 % of Ivorians were literate (60.1% of 0 men and 38.2% of women), compared with 54.1% of Ghanaians (73% of men 200001 02 03 04 05 and 45.7% of women). Similarly, life expectancy is considerably below that for Source: Economist Intelligence Unit. Ghana, at only 45.9 years in Côte d'Ivoire compared with 56.8 years in Ghana.

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Comparative human development indicators (2003 unless otherwise indicated) Côte Burkina d'Ivoire Mali Faso Nigeria Ghana Human Development Index 0.420 0.333 0.317 0.453 0.520 Real GDP per head (US$; in PPP terms) 1,476 994 1,174 1,050 2,223 Life expectancy at birth (years) 45.9 47.9 47.5 43.4 56.8 Adult literacy rate (%) 48.1 19.0 12.8 66.8 54.1 Combined primary, secondary & tertiary education gross enrolment ratio (%) 42 32 24 64 46 Adults living with HIV/AIDSa (%) 7.0 1.9 4.2 5.4 3.1 Population below poverty lineb (%) 15.5 72.8 44.9 70.2 44.8 a Ages 15-49 (2003). b The poverty line is defined as an income of US$1 per head per day (1990- 2001). Source: UN Development Programme, Human Development Report, 2005.

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

The education system is At a time of mounting fiscal difficulty in the late 1990s, the government of in crisis 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 2002/03, net primary school enrolment was 61%, but only 21% 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 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 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.

Health

Poor healthcare provision Healthcare provision is limited. According to the UN, the probability of not surviving to age 40 at birth was 40.2% in 1999, compared with 27% in neighbouring Ghana. The UNDP estimates that there are only 9 physicians per 100,000 people and that there are only 0.8 hospital beds per 1,000 people. 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 threat of AIDS

According to UNAIDS, the international body co-ordinating the fight against AIDS, 570,000 people were infected with HIV in Côte d'Ivoire at the end of 2003. The infection rate among adults was said to be 7%, one of the highest in West Africa. About 47,000 people died of AIDS-related illness in the country in 2003 alone. An estimated 310,000 children aged 17 or younger have lost their mother or both parents to AIDS since the beginning of the epidemic. The death toll is certain to rise further, since an estimated two-thirds of sexually active Ivorians under the age of 24 are thought not to use condoms. This is partly because the government's response to the disease has been slow. The national anti-AIDS Programme was due to be re-activated in 2002, backed by a US$42m loan from the World Bank, but progress in fighting the pandemic has been hugely set back by the civil war. Whereas some indicators suggested that the spread of HIV had crested, it is now widely feared that the war and the large population movements caused by it have sparked a further increase in the spread of the disease 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

A fertile country 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 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

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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. 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

The road network needs an Côte d'Ivoire has the most developed road network in West Africa, with around overhaul 82,000 km of classified roads, about 6,500 km of which are primary roads and 7,000 km secondary roads. Under-investment 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 increasing 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 entry of major cities, secondary roadblocks and escort fees for trucks that travel in convoys between the government- and rebel-controlled zones.

Traffic congestion Another priority for the government when the conflict ends will be to ease transport congestion in the commercial capital, Abidjan. There are an estimated 3.8m people living in Abidjan and its surroundings, equivalent to about 21% of the total 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 Yopougon and Abobo have failed to materialise. There are an estimated 15,000 taxis in the capital.

Falling rail traffic 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 up to the border with Burkina Faso, 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 with 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.

Many airlines stop their The modernisation and expansion of Abidjan's international airport was services 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. At present very few international airlines fly to Abidjan. The main ones are Air France, SN Brussels, Royal Air Maroc and various African companies. Aeria of France, which took over the management of the airport in 1997, could run into serious financial difficulties if the airport does not regain its position as the hub of West Africa soon. 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.

Abidjan is a busy regional port 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% in 2003. Neighbouring ports, most notably Tema (Ghana) and Lomé (Togo), have seen their traffic increase over the past three 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 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 The telecommunications sector has experienced extremely rapid growth since sector is expanding fast the granting of a first GSM licence and the government's sale of the national telecommunications company, CI-Telcom, 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%

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of the company. There are two mobile-phone companies currently operating in the country: Orange Côte d'Ivoire (previously also known as Ivoiris), owned by France Telecom (85%) and MTN Côte d'Ivoire (which in July 2005 replaced Telecel, which was bought by a South African firm, MTN International). A third operator, Cora de Comstar, which is partly owned by a US firm, Western Wireless, was shut down in September 2003 in a dispute between the government and foreign and local shareholders. Orange used to be the market leader. Both Orange and MTN Côte d'Ivoire claim that they had over 1m subscribers at the end of 2005. The fast spread of mobile phones has spawned a vibrant business in mobile "phone booths", which are found on virtually every street corner.

The press is relatively partisan The Ivorian press is mainly a mouthpiece for political parties, but some papers are considered relatively balanced. Journalists have been accused of fuelling ethnic rivalry since 1999. The long-time quasi-official daily, Fraternité-Matin, which claims a circulation of 50,000, is a relatively reliable source of information. Another daily, Notre voie, is owned by the pro-FPI Nouvel Horizon media group and voices opinions close to those of the president, Laurent Gbagbo. Le National is pro-PDCI and Le Patriote is pro-RDR. 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. Radiodiffusion-Télévision Ivoirienne (RTI) is a government-owned corporation, 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 the 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 they control. Abidjan has FM relays of Radio France International, BBC Africa and Africa No. 1 radio.

Internet access is relatively The Internet in Côte d'Ivoire is well-developed by regional standards and there well developed 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 of end-2001. Internet telephony has made inroads as well, particularly for international calls—there has been a proliferation of VOIP Internet 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 to any computer equipped with a dedicated wireless modem.

Energy provision

Electricity generating capacity Côte d'Ivoire is a net exporter of electricity. Gas-powered stations generate more is high 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 a 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 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.

Oil exports to Nigeria Côte d'Ivoire's own oil is mainly exported, while oil is imported (from Nigeria notably) and refined for domestic use. Refined oil is 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 barrels/day of crude oil. It produces petrol, diesel fuel and gas oil. 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.

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The economy

Economic structure

Main economic indicators, 2005 (Economist Intelligence Unit estimates unless otherwise indicated) Real GDP growth (%) 0.8 Consumer price inflation (av; %) 4.0 Current-account balance (US$ m) -289.0 Exchange rate (av; CFAfr:US$) 527.47a Population (m) 18.1 External debt (year-end; US$ m) 13,211.6 a Actual. Source: Economist Intelligence Unit, CountryData.

Côte d'Ivoire is world's largest According to the most recent World Bank estimates, the agricultural sector, supplier of cocoa including forestry, accounted for 27.3% of GDP in 2003. Côte d'Ivoire is the world's largest producer of cocoa, accounting for more than 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, and ranks fourth or fifth in terms of world production. The industrial sector, including construction, accounted for 17.6% of GDP in 2003. Prior to the current crisis, manufacturing activities had expanded rapidly, led by agro-processing, but 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 55.1% of GDP in 2003.

World cocoa supply and demand ('000 tonnes; crop years, which can vary slightly) 2003/04 2004/05 Côte d'Ivoire 1,386 1,273 Ghana 737 518 Indonesia 464 472 Cameroon 163 187 Brazil 165 170 Nigeria 185 165 Ecuador 105 105 World total (incl others) 3,510 3,296 World grindings 3,230 3,321 Balance 251 -53

Source: ED&F Man, Cocoa Market Report, October 2005 Update.

On the expenditure side, private consumption accounted for 60.6% of national income in 2003, 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, dropping for the second consecutive year to only 7.8% of GDP in 2003.

The country's economic In the past Côte d'Ivoire was often dubbed the "milk-cow" of the West African dominance has faded 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.

Comparative economic indicators, 2005a Côte d'Ivoire Ghana Nigeria South Africa France GDP (US$ bn) 15.9 10.3 93.3 237.2 2,116.4 GDP per head (US$) 876 467 667 5,573 34,901 GDP per head (US$ at PPP) 1,735 2,581 1,197 12,877 31,293 Consumer price inflation (av; %) 4.0 15.2 17.6 3.9 1.7 Current-account balance (US$ bn) -0.3 0.1 8.6 -9.8 -30.1 Current-account balance (% of GDP) -1.8 0.9 9.2 -4.1 -1.4 Exports of goods fob (US$ bn) 6.4 2.9 49.9 52.4 441.8 Imports of goods fob (US$ bn) -4.7 -4.3 -25.6 -54.7 -471.8 External debt (US$ bn) 13.2 7.0 32.3 29.1 – Debt-service ratio, paid (%) 5.6 7.4 3.3 7.1 – a Economist Intelligence Unit estimates. Source: Economist Intelligence Unit, CountryData.

Economic policy

Little room for economic The central feature of Côte d'Ivoire's economic policy is the pegged exchange- manoeuvre 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

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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.

Relations with the IMF have Policy in the 1970s was set against a background of high cocoa prices and hopes been difficult for the oil sector—which were ultimately unfulfilled. 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, which were severely affecting government revenue, and because the IMF, World Bank and EU were withholding budgetary support. Although the transitional government showed some commitment to essential reforms, negotiations with the IMF over a staff-monitored programme (SMP) failed in 2000 because of fiscal slippage and outstanding governance issues. The transitional government's record on structural reform was also mixed. Despite progress in liberalising trade and the cocoa and coffee sectors, the privatisation programme remained stalled.

The IMF resumes its support The IMF announced its decision to approve a six-month SMP in June 2001, after two of its main conditions were met: the restoration of the EU-Côte d'Ivoire economic co-operation programme and the adoption of a trimmed budget for 2001. The IMF expressed general satisfaction with progress after a mission to Côte d'Ivoire and formally resumed its financial assistance on March 29th 2002, under a US$366m poverty reduction and growth facility (PRGF) scheduled to 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) Amount Amount Type of loan Approval date Expiry date approved drawn PRGF Mar 2002 Mar 2005 293.68 58.54 PRGF Mar 1998 Mar 2001 285.84 123.86 PRGF Mar 1994 Jun 1997 333.48 333.48

Source: IMF.

IMF programmes are Since the onset of the crisis in September 2002, which resulted in the suspended again 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 comes 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—have yet to be disbursed, owing to the lack of progress on the political front. Only with the end of the current political crisis will the government be able to approach the World Bank and the IMF to agree new programmes.

Economic policy is kept in Economic policy during the civil war has focused simply on keeping the main abeyance by the crisis functions of government operating. The advent of the new government under the prime minister, Charles Konan Banny, has not changed this fundamental priority. During its tenure (2003-05), the preceding 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. However, 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. 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 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. 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.

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Economic performance

A short-lived return A deep recession gripped Côte d'Ivoire throughout most of the 1980s, induced to prosperity 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. 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 1.5%, 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 in 2004, to 1.6%, as a result of the strong performance of the cocoa sector. The Economist Intelligence Unit estimates GDP growth of below 1% in 2005. 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 which 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. According to the BCEAO, inflation remained high in 2004 at 3.2%, the highest rate in the UEMOA region, but showed signs of moderating in the final months of the year. 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. Inflation is estimated to have picked up to 4% in 2005, given the low base of the consumer price index in 2004 and increased difficulties in trading basic goods.

The informal sector is on the rise

In any event, 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 three 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, as they have been for three years now, 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 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 three years having now elapsed in this fashion, there are considerable vested interests in prolonging the status quo. Regional trends

An economy centred on Côte d'Ivoire's economy is centred on the south; Abidjan is the country's the south 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. The country's first 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 provides a Agriculture dominates the economy, accounting for 23% of GDP and providing livelihood for the majority 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 (315,000 tonnes in 2005, according to the UN Food and Agriculture Organisation) and rice (800,000 tonnes), are supplied on commercial terms. Milled rice production was 541,000 tonnes in 2004, after a peak of 620,000 tonnes in 2001. 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

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account for 60% of the area under cultivation. They are mostly produced by smallholders. The main cocoa harvest takes place in October (through 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 of cocoa was the norm in the 1980s). Despite the outbreak of armed conflict on the fringes of the cocoa- producing region, with cocoa price reaching 20-year highs there was strong incentive to producers, while giving the government some breathing room. Cocoa production totalled 1.36m tonnes in crop year 2002/03 (October- September) and 1.39m tonnes in 2003/04.

Performance of the cocoa However, the performance of the sector has since begun to deteriorate, with

sector deteriorates production in the 2004/05 crop year estimated at 1.27m tonnes and preliminary estimates of the 2005/06 crop year at only 1.1m tonnes, substantially down from previous years. This trend suggests that the conflict-driven stress on the sector has finally begun to take its toll, with 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 massive outflows from Côte d'Ivoire, which have continued in 2005.

Cocoa marketing remains Cocoa marketing has long been marred by poor performance and corruption a problem 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 a Bourse du café et cacao (BCC). However, the resulting system has proven unsatisfactory: there are now a plethora of marketing organisations with overlapping responsibilities and which 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 have buttressed the suspicions and confirmed instances of sector fund misuse. 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 broadened 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. Set against the trend of decreased cocoa production in the 2004/05 and 2005/06 crop 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.

Other export crops Côte d'Ivoire's coffee production is 250,000-300,000 tonnes in normal years. Coffee cultivation reached a peak of 379,000 tonnes in 1999/2000, but fell back to 301,100 tonnes in 2000/01 and only 109,300 tonnes in 2002/03, 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. Production in 2003/04 slightly recovered to 154,100 tonnes. Palm oil and rubber are Côte d'Ivoire's two other traditional export crops, although their production has greatly declined over the years owing to low prices and the availability of substitutes. Palm oil production has fallen steadily

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in recent years to only 215,900 tonnes in 2001, although it rebounded to 231,400 tonnes in 2003 and 292,800 tonnes in 2004. Rubber production now seems to have stabilised—production was 137,600 tonnes in 2002, 147,900 in World commodity prices 2003, and 141,400 tonnes in 2004. (US cents/lb)

Cocoa beans Côte d'Ivoire became one of the Franc Zone's leading producers of cotton in the Coffee beans, robusta early 1990s, with production of 393,000 tonnes in 2001/02 and 380,000 tonnes Cotton 90 in 2002/03, slightly down on the 398,700 achieved in 1999/2000. However, 80 cotton is produced largely in the rebel-held northern part of the country, and its 70 production and export have been severely disrupted by the conflict. It has 60 become difficult to gauge real cotton production levels, as only a fraction of 50 cotton is being delivered to the textile mills and export facilities in the 40 government-held zone, while considerable amounts are being sold into Mali 30 and Burkina Faso. Bearing these caveats in mind, Ivorian cotton production is 20 estimated to have recovered to 300,000 tonnes in 2004/05, but is forecast to fall 19979899 2000 01 0203 04 05 to only 245,000 tonnes in 2005/06, in part due to the higher cost and lower Source: Economist Intelligence Unit. availability of fertilisers.

Non-traditional exports 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, recovered slightly to 256,000 tonnes in 2002 and 280,500 tonnes in 2004. Uncertainty prevails in this sector, since Côte d'Ivoire, like other African Caribbean 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 226,700 tonnes in 2004 as a result of poor irrigation and increased competition from Latin America.

Timber is a major export 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. Only processed wood is exported as a result. According to the government, these exports rose from approximately 371,800 tonnes in 2003 to 428,700 tonnes in 2004.

Fishing is transformed 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 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

Oil production is to triple 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 agreement 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 gas field 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. Daily gas output has also picked up sharply to reach 147m cu ft in 2002, 152m cu ft in 2003 and 153m cu ft in 2004, compared with only 123m cu ft in 2001. Oil production has also been boosted by production from another oilfield, Baobab, developed by CNR. Baobab currently produces approximately 48,000 b/d and CNR expects this to increase to 65,000 b/d in 2006 as the remaining wells are completed. Baobab's reserves are estimated at 200m barrels. Oil production has, in general, remained insulated from political events, as it takes place at offshore fields serviced directly from Abidjan.

Gold and diamond mining 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. 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. 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, has been conducting a feasibility study in a new mine in Bonikro (90 km south of Yamoussoukro), which was expected to be completed by December 2005.

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Nickel and iron 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 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 is 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.

Manufacturing

Manufacturing has a By the standards of Sub-Saharan Africa, Côte d'Ivoire's manufacturing base is mixed record 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 re-open. Consequently, manufacturing output declined by 11.9% in 2002 and 12.9% in 2003, a trend which probably continued in 2004. In the first ten months of 2005, however, manufacturing output is estimated to have recovered by 7.3% compared with the same period in 2004, helped by increased production at the oil refinery and rising textile production.

A dynamic agro-processing Since privatisation started in the early 1990s, agro-industry has attracted by far industry 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 the 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 the 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 some minority shares in some privatised parastatals. Most of them are quoted on the regional stock exchange, Bourse régionale des valeurs mobilières (BVRM), 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 sub-region. However, the civil war and ensuing instability have taken a severe toll on the agro-processing sector and output declined by 20% in 2003. Agro-processing activity is estimated to have recovered slightly in 2004 and to have increased by 9.1% in the first ten months of 2005.

Cotton and textiles are The textile parastatal, Compagnie ivoirienne de développement des textiles restructured (CIDT), was split into three blocks in October 1998. The government has 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 103,000 tonnes, and a silk mill. The other two cotton processing companies are Compagnie cotonnière ivoirienne (LCCI), which is 70%-owned by the Swiss- based group Aiglon, and Société Ivoire Coton, which is owned by the Aga Khan group and the Belgian group Reinhart. LCCI opened a new mill, near Korhogo, in May 2001. With a capacity of 100,000 tonnes, the new plant is the biggest cotton ginnery in West Africa. This puts the country's total ginning capacity at 460,000 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. Although it is difficult to gauge how quickly the sector is poised to rebound when the ongoing conflict is settled, the higher production expected in 2004/05 and initiatives by the New Forces and other actors in the sector have resulted in a small recovery of the sector in 2005.

Construction

Donors will fund construction Once booming, activity in the construction sector was hit by the economic if peace is agreed 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 is agreed. Much of this will go to construction projects and work is likely to move ahead on some big projects which have already been mooted, such as the construction of a toll bridge in Abidjan and extension works at the Port Autonome d'Abidjan. The demand for housing is high, particularly in Abidjan. Yamoussoukro could become an important market for construction in the next few years, as public institutions are transferred to the administrative capital. About 500,000 tonnes of cement are

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produced and exported to the sub-region 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

The banking sector is fragile 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, the largest commercial banks all have a foreign ownership stake, which will ensure that they have access to resources to help 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), followed by Société ivoirienne de banques (SIB), which is 51%-owned by Credit Lyonnais, also of France. An 80% share of the BIAO, which was formerly state owned, was sold to Banque Belgolaise—the African banking subsidiary of the Belgian- Dutch financial group Fortis—in February 2000. 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, Caisse autonome d'amortissement (CAA) and Banque de l'habitat (BIH). The CAA remains fragile and its continued operations pose risks for the payments system while increasing the government's contingent liabilities. 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 was opened in Bouaké, the Caisse d'épargne populaire et de crédit de Côte d'Ivoire (CEPC-CI).

A regional stock exchange is The BRVM began trading in September 1998 after many delays, replacing the located in Abidjan 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 2005 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

Plans to boost tourism The tourism industry remains under-developed 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 light of the political situation.

A well developed commercial Côte d'Ivoire has a large and well-developed commercial sector. Much

sector 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

A comfortable trade surplus 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 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 from an average of 49.4 US cents/lb in 2001 to 80.9 US cents/lb in 2002 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 (oil exports are estimated to have exceeded cocoa exports in 2005); this reflects both increased oil production and high international oil prices. Exports of cocoa beans and products amounted to only 33.2% of total exports, and petroleum products and crude oil exports for 18.5% in 2004. 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, 16.5% in 2003 and 13% in 2004. 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 2003 and 2004—they rose to CFAfr411.8bn in 2003 and are estimated at CFAfr746.9bn in 2004—was probably the result of purchases of weaponry. 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 2003-04, it remained high, at US$2.7bn in 2004, reflecting higher oil exports.

The EU is the main Although the government wants to diversify the country's trade partners, the trading partner EU still accounts for around two-thirds of Côte d'Ivoire's total trade. France, the former colonial power, remains the most important source of imports, accounting for 23.6% of total imports in 2004, but it has been supplanted by the US as the main destination of exports (11.1% of total exports) and accounted for only 9.1% of total exports in the same year. Trade links are also strong with Nigeria, which provided 18.7% of the country's imports (overwhelmingly oil) in 2004. 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

Invisibles and the current account

The current account has been Côte d'Ivoire has traditionally run a current-account deficit. However, in recent in surplus since 2002 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$61.3m in 2001 to a surplus of US$768.2bn in 2002 and remained in surplus in 2003 and 2004, although the surplus fell to US$294.6bn and US$302.6bn respectively, in line with movements in the trade surplus. However, 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.

Freight represents the largest The bulk of service payments relate to transport, as Côte d'Ivoire is the main outflow of services payments 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 were still ten times higher than the total income earned by Ivorian shippers and carriers, with net freight outflows put at US$477.3m in 2003. 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 2004. Debits on the income account fell to US$723m in 2001 but rose again in 2002 and reached US$885m in 2004. Repatriation of profits from foreign companies based in Côte d'Ivoire remained steady, at around US$250m per year.

Workers' remittances Current transfers were also in debit in 2004, by an estimated US$461.9m, owing remain high 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$664.8m in 2004, 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$43.2m in 2004, compared with nearly US$280m in 1995.

Capital flows and foreign debt

FDI falls back in the second Although net foreign direct investment (FDI) rose strongly after the currency half of the 1990s devaluation in 1994, from US$78m in 1994 to US$450m in 1997, it fell slowly back to around half this level, totalling US$215m in 2002 according to the Foreign direct investment inflows UN Conference on Trade and Development (UNCTAD). The bulk of foreign (US$) investment (mostly French) in the 1990s was directed towards oil exploration, 400 electricity, telecommunications, export-processing activities (mostly agro- 350 industry) and transport. Although FDI inflows fell further in 2003, to US$165m, 300 owing to the ongoing crisis, they recovered substantially in 2004, to US$360m, 250 as a result of increased investment in the oil sector. Despite the opening in 1998 200 of a regional stockmarket, Bourse régionale des valeurs mobilières (BRVM), in 150 recent years portfolio investment has been limited. In 2000-04 it averaged an 100 annual net outflow of US$25.1m. 50 Côte d'Ivoire has long suffered from a heavy debt burden, owing to the 0 19992000 01 02 03 04 country's high level of borrowing during the late 1970s and early 1980s. Source: UN Conference on Trade and However, loan disbursements have fallen behind principal repayments since Development. 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$12.2bn at end-2003, equivalent to 93.8% of GDP. Public and publicly guaranteed external debt (excluding debt to the IMF)

accounted for US$9.7bn in 2003, 42% of which was owed to bilateral, official creditors, 34% to multilateral lenders and 24% to commercial lenders. The private sector's stock of external debt in 2003 remained comparatively small, at US$2.4bn, reflecting Côte d'Ivoire's limited access to global capital markets.

Debt rescheduling and HIPC Côte d'Ivoire has had two major external debt-rescheduling deals since the mid- forgiveness 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 which 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 there is unlikely to be any until the political crisis has been resolved and elections held.

Foreign reserves and the exchange rate

Foreign-exchange reserves The value of the country's international reserves (excluding gold) soared from increase 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. Reserves fell back to US$1.30bn at the end of 2003, before recovering to US$1.69bn by the end of 2004 as a result of the country's strong export performance, as cocoa production has survived the crisis relatively unscathed, and increased oil production coupled with strong international oil prices. In addition, growth in US-dollar terms has been boosted by the decline of the US dollar against the euro. By end-October 2005 reserves were at US$1.32bn. 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 CFA franc is successfully The overvaluation of the CFA franc became a chronic problem for all countries linked to the euro 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. With the euro stabilising against the US dollar in 2005, the CFA franc averaged CFAfr527.5:US$1. Despite the strengthening of the CFA franc against the US dollar, we believe 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.

Regional overview

Membership of organisations

African Union (AU) The African Union (AU) is the successor to the Organisation of African Unity (OAU) and is based in the Ethiopian capital, Addis Ababa. The AU was formally launched in July 2002 at a meeting of African heads of state in the South African city of Durban. This came two years after the AU's formation was first agreed in Togo in July 2000, and followed a one-year transitional period that began after the ratification of the constitutive act of the AU by two-thirds of the member states in May 2001. 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 will not play a legislative role for five years. The president is currently Gertrude Mongella from Tanzania, and it is currently located near Johannesburg, in South Africa. 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. In practical terms, the most high-profile AU event is the annual conference of heads of state, which is hosted by the member state that is due to hold the chairmanship of the organisation for the following year. The day-to-day affairs of the AU are managed by the AU commission, which is modelled on the EU commission and was endorsed by the AU heads of state summit in July 2003. The commission is headed by the former Malian president, Alpha Konaré, aided by a deputy, Patrick Mazimhaka of Rwanda, both of whom were elected at the summit. There are also seven appointed AU commissioners. One of the main problems facing the AU is that many of the proposed new institutions and policy co-ordination mechanisms are costly and cannot be funded within the AU's current resource allocations. To help to counter this, at the July 2004 Annual Summit Mr Konaré presented a 2004-07 Strategic Framework aimed at launching Africa into the 21st century. Under this, member states are supposed to pledge 0.5% of GDP to fund the AU, which will 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). This is a potential bone of contention with the South African government, which is keen for Nepad to remain in its South African headquarters. However, to date, many members still fail to pay their membership dues, so further commitments, other than from external donors, are unlikely. In December 2003 donors and external lenders expressed their full support for the AU's initiatives and the creation of new institutions. 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 very 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, in the last few years the AU has taken a more active role in helping to resolve political crises, such as in Côte d'Ivoire, Togo and Comoros. In this respect, it has shown a much greater willingness to overcome opposition to the principle of non-interference, which remains a contentious issue among member governments and was a major hindrance to the OAU's ability to function effectively. However, its intervention has had a mixed success rate, particularly in Côte d'Ivoire where little progress has been made, while it has avoided a wider involvement in more contentious political crises, such as that in Zimbabwe. This has opened it to charges that it is able to impose solutions on smaller states, but not deal with problems in its larger members. In 2003 the AU established a Peace and Security Council (PSC; to replace the OAU's Mechanism for Conflict Prevention, Management and Resolution) 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 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 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". However, even without the establishment of the PSC, since May 2003 the AU has had an observer mission in Burundi, led by South Africa and including troops from Mozambique and Ethiopia, to help enforce a peace agreement in Burundi's civil war. An AU observer mission was also sent to the Darfur region of Sudan in July 2004, and a protection force is being deployed although this has proved much too under-resourced to be effective. However, if it was increased, to become a real peacekeeping force, it could prove to be the first real test of the AU's commitment to intervening in member countries' domestic affairs.

Economic Community of The Economic Community of West African States (ECOWAS) was established West African States in 1975 by 15 West African countries: Benin, Burkina Faso, Côte d'Ivoire, The

(ECOWAS) 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. 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.

Six other ECOWAS members—The Gambia, Ghana, Guinea, Liberia, Nigeria and Sierra Leone—signed an agreement in December 2000 to create a second monetary union in the region and defined a set of convergence criteria: a budget deficit of less than 4% of GDP; central bank financing of budget deficits limited to 10% of the previous year's tax revenue; an inflation rate of no more than 5%; and foreign reserves equivalent to at least six months of imports. A first step towards monetary integration was 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 monetary unit in January 2003. The West African Monetary Zone (WAMZ) Stabilisation and Co-operation Fund was created in 2001 with planned capital of US$100m to assist member countries with temporary balance-of-payments problems. The two monetary zones were expected to merge in 2004. However, progress has been slow, and the WAMZ countries agreed in November 2002 to postpone the creation of their new currency until July 2005, since none of the countries had met most of the convergence criteria. However, this has since been postponed to 2009, and this new deadline is also unlikely to be met. The IMF has expressed its opposition to such a monetary union, since it would be dominated by Nigeria, whose economic imbalances could lead to monetary instability in the whole region. 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 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) was established to enforce an agreement for ending the civil war in Liberia in 1990. Dominated largely by Nigeria, Ecomog intervened to restore peace in Sierra Leone in 1997 and in Guinea-Bissau in 1998. Its forces were deployed in Côte d'Ivoire at end-2002 under the leadership of Senegal to help to secure a ceasefire. In August 2003 Liberia' s interim government and rebel groups signed a peace deal in Accra, Ghana, permitting the establishment of an ECOWAS "interposition" force, the ECOWAS Mission in Liberia (ECOMIL), which maintained the ceasefire until October 2003, when the UN Mission in Liberia took over, mandated by the UN Security Council. 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.

Franc Zone The African members of the Franc Zone share a common currency, the CFA franc, which is fixed to—and convertible with—the euro through special monetary arrangements with France. 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 Franc Zone guarantees full convertibility of the CFA franc and maintains a fixed exchange rate between the CFA franc and the euro. Monetary integration is both horizontal—in the form of two 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)—and vertical, through "operations accounts" (comptes d'opération) held with the French Treasury. The operations account is the principal payment mechanism in the zone. The French Treasury guarantees the convertibility and stability of the currency issued by the regional central banks, which in return are required to maintain a minimum of 65% 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 from the French franc to the euro in January 1999, at a fixed rate of CFAfr655.96:€1, and has remained firm since then. Although there have been ongoing rumours of a further devaluation, particularly at the time of the introduction of the euro, these have come to nothing, despite the ongoing conflict in Côte d'Ivoire—the largest economy in the zone—since September 2002 and the appreciation of the euro against the US dollar in 2003-04, which has undermined the competitiveness of exports. This mainly reflects the fact that the negative impact of the strong euro has been offset by high global commodity prices, which have helped to maintain healthy terms of trade among member states and the strong political opposition to devaluation. However, if world commodity prices were to fall sharply while the euro remained strong, this political resolve would be more severely tested.

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.

Cotonou Convention A new, 20-year, convention was signed in June 2000 in Cotonou, Benin, offering a group of 77 African, Caribbean and Pacific (ACP) countries preferential trade and aid links with the EU. The Cotonou Convention replaced Lomé IV, a convention that was signed in 1989 and replaced previous agreements signed in 1975, 1979 and 1984. Although similar to the Lomé conventions, the new convention has a stronger political dimension. Respect for human rights, democratic principles and the rule of law were essential components of Lomé IV. Under the Cotonou agreement, the ACP countries have also agreed to promote good governance, combat corruption and try to prevent illegal immigration into the EU. A revision of the Cotonou Convention is made possible every five years by a special clause. Negotiations between the ACP countries and the EU for the review and adaptation of the accord started on May 2004 and were concluded on February 23rd 2005. The aim of this revision was to enhance the effectiveness and quality of the ACP-EU partnership. Points of agreement focused on the political dimension, development strategies and investment facilities, as well as implementation and management procedures. Under previous conventions, ACP products, 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. Because the type of trade agreement established by the Cotonou Convention does not comply with the rules of the World Trade Organisation (WTO), the new agreement offers a negotiating framework for tailor-made regional free-trade agreements known as Economic Partnership Agreements (EPAs), under which ACP countries, preferably within existing economic groupings, will gradually open their domestic markets to European products. Given the adjustment costs involved, a preparatory period of eight years (2000-08) has been agreed, during which the old system of preferences will continue to apply. However, under existing global trading rules, the 33 African countries classified as least developed countries will still have the option of entering the EU's generalised system of preferences (GSP). Unlike the Lomé Convention, the GSP, which benefits all developing countries, complies with the rules of the WTO because it is based on the twin principles of non-reciprocity and non-discrimination. In September 2003 the ACP countries and the WTO signed an agreement at the Cancun trade round, whereby the WTO will provide training and technical assistance to ACP countries as a form of mutual co-operation. The European Development Fund (EDF, concluded for a five-year period and composed of voluntary contributions from member states) will continue to be the main source of multilateral European aid to the ACP countries. Under the new convention, EDF instruments have been regrouped and rationalised into two programmes: one to provide grants for long-term development schemes being carried out either at 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 (2000-05) will total €13.5bn (US$12.9bn). In addition, about €10bn left undisbursed from the previous EDF will remain available until 2007, and the European Investment Bank will provide €1.7bn. The financial protocols are concluded for a period of five years, with the ninth EDF running from 2000 to 2005. The Cotonou Convention finally entered into force in April 2003, with all 15 EU members and 76 ACP nations (not Somalia) ratifying the treaty. A month later the ACP representatives signed the Brussels Declaration, which calls for the timely and effective implementation of EDF funds. This represents a commitment towards the efficient disbursement of EDF resources for the benefit of ACP countries. In June 2004, at the 4th Summit of ACP Heads of State, the ACP council of ministers was mandated to ensure the effective co-ordination and coherence of EPA negotiations within the ACP and between various ACP regions, as well as with the WTO negotiations, so as to ensure unity.

Union économique et The treaty establishing the Union économique et monétaire ouest-africaine monétaire ouest-africaine (UEMOA) was signed in January 1994, two days before the devaluation of the

(UEMOA) CFA franc, and replaced the Union monétaire ouest-africaine, 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 de l'Afrique de l'ouest (BCEAO). At present all countries in the union produce a medium-term integration programme for the start of each year. These have the following longer-term goals. • The creation of a customs union. Customs duties on produce and manufactured goods traded between member countries have been lifted and a common external tariff adopted since January 2000. The rate of the common external tariff ranges from zero to 20%, depending on the goods. For the first four years of the new regime a special tax may be imposed to protect goods in sensitive sectors. Financial compensation granted to member states by UEMOA to underwrite losses of customs revenue will be scrapped at the end of 2005, according to UEMOA officials. • The strengthening of members' fiscal policy. The convergence criteria for economic union are 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. • The harmonisation of business law (through the Franc Zone's Organisation pour l'harmonisation en Afrique du droit des affaires) and taxation law. The aim is to harmonise the presentation of data on government budgets, external and domestic debt, national accounts and the balance of payments (through the Système comptable ouest-africain), and to develop regional mining and investment codes. A specific problem working against efforts towards economic convergence is the continued instability in Côte d'Ivoire, the largest economy of the UEMOA.

Economic union is likely to remain low on the Ivorian government's agenda until the political crisis is fully resolved. In February 2004 the World Bank approved a US$408m financing package for the Banque ouest-africaine de développement (BOAD) in support of capital markets and infrastructure integration efforts within the region.

Appendices

Sources of information

National statistical sources Owing to 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 also not available at present. 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.

International statistical sources 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.

Select bibliography and Signaux d'Abidjan (monthly), Mission économique, Ambassade de France, websites Abidjan Investir en Zone Franc website, online at http://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 (daily), Le Jour Notre Voie (daily) and La Patriortie (daily), and useful links, online at http://www.abidjan.net M Jarret and F Mahieu, La Côte d'Ivoire de la destabilisation 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

International Crisis Group (ICG), Côte d'Ivoire: The worst may be yet to come, (March 2005) and Côte d'Ivoire: Halfway measures will not suffice (October 2005) Dakar/Brussels, http://www.crisisweb.org IMF, Côte d'Ivoire: Statistical Appendix, June 2004 The UN mission in Côte d'Ivoire (MINUCI): http://www.un.org/french/peace/peace/cu_mission/minuci/index.html Websites for the main political parties are: Mouvement patriotique de Côte d'Ivoire (MPCI): http://www.supportmpci.org Front populaire ivoirien: http://www.fpi-ci.org Rassemblement des républicains (RDR): http://www.rdrci.org Parti démocratique de Côte d'Ivoire (PDCI): http://www.pdcirda.org/

Reference tables

Population (m, mid-year estimate) 2000 2001 2002 2003 2004 Population 16.7 17.1 17.3 17.6 17.9 % change 2.1 2.4 1.2 1.7 1.7

Source: IMF, International Financial Statistics.

Transport statistics ('000 tonnes, unless otherwise stated) 1999 2000 2001 2002 2003 Freight (Abidjan and San-Pédro) 16,513 15,951 14,864 16,126 15,507 Exports 6,350 6,762 5,399 6,855 6,960 Imports 10,163 9,189 9,468 9,272 8,546 Rail Passengers ('000) 243 221 288 224 89 Freight 771 851 1,009 879 180 Air transport Passengers ('000, incl transit) 1,258 1,078 1,043 821 773 Freight 23 20 20 17 16

Sources: Institut national de la statistique; Port Autonome d'Abidjan et San-Pédro.

Electricity production and consumption ('000 kwh) 2000 2001 2002 2003 2004 Net domestic production 4,718 4,865 5,276 5,064 5,370 Hydroelectric 1,755 1,792 1,722 1,823 1,740 Domestic consumption 4,069 2,959 2,935 2,693 3,106 Exports 1,236 1,156 1,569 1,325 1,420

Source: Ministère de l'économie et des finances.

Petroleum production and consumption (m tonnes unless otherwise indicated) 1999 2000 2001 2002 2003 Production 3,779.1 3,511.4 2,994.0 2,750.3 2,637.2 Consumption 1,208.6 1,004.6 953.5 860.8 766.3 Petrol (m cu metres) 75.2 63 172.1 144.5 125.5 Gas-oil (m cu metres) 832.9 761.9 568.4 506.4 451.5 Diesel 31.6 20.7 21.1 20.4 11.4 Fuel oil 61.1 53.8 53.2 37.7 32

Source: Ministère de l'économie et des finances.

Government finances (CFAfr bn) 2000 2001 2002 2003 2004a Total revenue 1,270.6 1,376.6 1,469.5 1,401.2 1,493.8 Taxes 1,077.5 1,168.4 1,259.3 1,189.9 1,240.4 Non-tax revenue 159.6 167.9 169.1 161.9 193.3 Grants 33.5 40.3 41.1 49.4 60.1 Total expenditure and net lendingb 1,360.2 1,306.9 1,591.6 1,611.0 1,650.1 Recurrent expenditure 1,140.8 1,150.2 1,256.9 1,288.8 1,326.4 Salaries 454.1 484.1 523.5 539.3 545.8 Interest payments 294.3 259.7 265.6 217.4 186.2 Foreign 264.7 235.7 242.4 191.3 156.7 Domestic 29.6 24.0 23.2 26.1 29.5 Other recurrent expenditure 388.1 402.0 467.8 532.1 594.4 Capital 219.4 147.1 264.3 216.1 217.6 Externally financed 105.3 59.3 111.2 89.1 90.7 Other expenditure related to the crisis 0.0 0.0 57.5 97.0 94.2 Primary balancec 276.5 358.0 291.2 155.8 170.2 Balance (commitments basis) -89.6 69.7 -122.1 -209.8 -156.3 Balance (cash basis) 151.4 69.7 -122.1 -209.8 -156.3 Financing -160.1 -71.3 130.5 220.3 144.6 Domestic -120.0 -83.4 33.7 74.4 1.5 External -40.1 -142.3 96.8 145.9 143.1 New loans 126.8 28.4 255.8 39.3 41.1 Financing gap 0.0 -1.6 -8.4 -10.5 -11.7 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 2004.

Money, credit and interest rates (CFAfr m unless otherwise indicated; end-period) 2000 2001 2002 2003 2004 Money (M1) 1,154.0 1,324.8 1,750.5 1,145.1 1,300.4 % change, year on year -3.4 14.8 32.1 -34.6 13.6 Quasi-money 489.3 515.3 641.1 618.6 632.2 Money (M2) 1,643.3 1,840.1 2,391.6 1,763.7 1,932.6 % change, year on year -1.9 12.0 30.0 -26.3 9.6 Foreign assets (net) 73.2 396.4 931.2 493.5 701.7 Domestic credit 1,709.8 1,670.6 1,688.8 1,505.2 1,517.7 % change, year on year -4.5 -2.3 1.1 -10.9 0.8 Claims on central government 547.6 447.5 472.3 412.5 343.7 Claims on private sector 1,149.5 1,213.5 1,208.6 1087.5 1174.0 Bank rate (%) 6.0 6.0 6.0 4.5 4.0

Source: IMF, International Financial Statistics.

Gross domestic product (market prices) 2000 2001 2002 2003 2004 Total at current prices (US$ bn) 10.6 10.7 11.5 13.7 15.5 Total at current prices (CFAfr bn) 7,546.5 7,869.5 8,011.1 7,984.3 8,178.5 % real change -2.4 4.3 1.8 -0.3 2.4 Per head at current prices (US$) 634.7 625.7 664.7 778.4 865.2 % real change -17.4 -1.4 6.2 17.1 11.2

Sources: Banque de France, La Zone franc, Rapport annuel 2004; IMF, International Financial Statistics.

Gross domestic product by expenditure (CFAfr bn at current prices; % of total in brackets) 2000 2001 2002 2003 2004 Private consumption 5,176.5 5,297.5 4,695.8 5,241.8 5,342.3 (68.6) (67.3) (58.6) (65.7) (65.3) Government consumption 1,050.0 1,100.5 1,290.8 1,093.5 1,184.0 (13.9) (14.0) (16.1) (13.7) (14.5) Gross fixed investment 791.8 858.8 728.4 811.8 875.7 (10.5) (10.9) (9.1) (10.2) (10.7) Exports of goods & services 3,111.7 3,316.0 4,084.4 3,749.6 4,041.6 (41.2) (42.1) (51.0) (47.0) (49.4) Imports of goods & services 2,583.5 2,703.3 2,788.3 2,912.4 3,265.1 (-34.2) (-34.4) (-34.8) (-36.5) (-39.9) GDP 7,546.5 7,869.5 8,011.1 7,984.3 8,178.5

Source: Banque de France, La Zone franc, Rapport annuel 2004.

Consumer price inflation (2000=100; period averages) 2000 2001 2002 2003 2004 Index 100.0 104.3 107.5 111.1 112.5 % change, year on year 2.5 4.3 3.1 3.3 1.3

Source: IMF, International Financial Statistics.

Food crop production ('000 tonnes) 1999/00 2000/01 2001/02 2002/03 2003/04 Cereals Paddy rice 884.0 1,043.1 1,079.6 937.2 963.0 Maize 846.1 854.5 887.4 642.2 571.8 Roots & tubers Yam 2,875.0 3,105.0 3,198.1 3,718.2 4,142.4 Cassava 1,129.2 1,309.8 1,349.1 4,078.8 5,409.7

Source: Banque de France, La Zone franc, Rapport annuel 2004.

Production of main cash crops ('000 tonnes) 2000/01 2001/02 2002/03 2003/04 2004/05 Cocoa 1,212.4 1,264.7 1,246.5 1,377.7 1,315.0 Coffee 301.1 182.0 139.7 154.0 160.0 Cotton (seed) 287.0 393.0 367.5 241.5 300.0 Rubber 128.0 137.6 147.9 n/a n/a

Source: Banque de France, La Zone franc, Rapport annuel 2004.

Gold, oil and gas production 2000 2001 2002 2003 2004 Gold (kg) 3,444 3,672 3,570 1,313 1,219 Oil ('000 barrels) 2,578 2,099 5,457 7,506 8,125 Natural gas (BTU bn) 41,702 38,602 53,196 55,418 n/a

Source: Banque de France, La Zone franc, Rapport annuel 2004.

Manufacturing production (1984/85=100 unless otherwise indicated; seasonally adjusted) 2000 2001 2002 2003 2004 Petroleum & mineral extraction 47.5 32.3 57.5 100.5 104.0 % change -13.6 -32.0 78.0 74.8 3.5 Electricity & water 242.5 247.5 267.3 255.8 268.0 % change -0.3 2.1 8.0 -4.3 4.8 Textiles & clothing 120.3 109.5 83.5 61.8 66.3 % change -3.2 -9.0 -23.7 -26.0 7.3 Agro-industry 138.8 139.3 116.3 92.5 94.3 % change -6.5 0.4 -16.5 -20.5 1.9 Construction materials 204.3 174.3 191.3 149.8 188.0 % change -18.6 -14.7 9.8 -21.7 25.5 Timber 68.5 71.0 68.0 70.3 52.5 % change 0.7 3.6 -4.2 3.4 -25.3 Total manufacturing 140.0 136.0 119.8 104.3 106.8 % change -10.5 -2.9 -11.9 -12.9 2.4 Total industry (excl mining) 155.5 152.3 141.5 126.5 130.3 % change -7.9 -2.1 -7.1 -10.6 3.0 Total industry 139.8 135.5 129.5 122.8 126.8 % change -8.6 -3.1 -4.4 -5.2 3.3

Source: Institut national de la statistique.

Construction statistics ('000 tonnes, unless otherwise stated) 2000 2001 2002 2003 2004 Production indicator (1985=100) 165.3 136.5 149.0 136.0 138.5 % change -19.9 -17.4 9.2 -8.7 1.8 Clinker imports 1,215.6 1,181.8 1,201.5 866.0 1,352.0 Cement exports 628.6 649.6 605.8 120.1 458.4

Source: Institut national de la statistique.

Stockmarket indicatorsa (end-period, unless otherwise indicated) 2001 2002 2003 2004 2005 No. of listed Ivorian companies 38 38 38 39 37 Market capitalisation (CFAfr bn) 858.0 830.2 858.1 1,005.0 1,182.7 Turnover ratio (%) 0.7 1.4 0.7 0.1 0.1 BRVM-10b 84.1 82.4 88.3 102.7 149.9 BRVM compositec 77.5 74.2 76.5 87.6 112.7 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 (BRVM); Standard & Poor's, Emerging Stock Markets Review.

Exports (fob) (CFAfr bn) 2000 2001 2002 2003 2004a Total exports 2,534.4 2,669.4 3,531.1 3,189.6 3,457.7 Cocoa beans 601.1 737.8 1,196.2 1007.6 850.1 Petroleum products 473.5 355.7 405.8 294.6 484.4 Cocoa products 137.9 221.2 377.1 364.9 296.7 Timber & products 197.1 202.5 176.4 156.2 181.5 Crude oil 49.4 40.4 74.9 113.8 155.9 Cotton 105.0 91.0 93.4 103.1 81.5 Fish (tuna) 85.2 73.8 94.7 79.1 81.1 Coffee beans 182.3 76.4 50.8 45.9 49.2 Palm oil 29.4 27.7 31.6 30.5 37.2 Coffee products 32.1 27.7 32.3 36.7 19.5 a Estimates. Source: Direction générale des douanes.

Imports (cif) (CFAfr bn) 2000 2001 2002 2003 2004a Capital equipment 266.0 277.7 239.6 411.8 746.9 Raw materials & semi-finished products 883.0 832.3 713.8 583.6 845.1 Crude oil 484.6 396.0 290.9 311.2 546.6 Foodstuffs, beverages & tobacco 307.7 397.8 414.4 450.2 432.8 Rice 69.6 95.4 93.2 91.3 113.2 Other consumer goods 314.9 358.5 351.8 390.7 462.5 Total 1,771.6 1866.3 1,719.6 1836.4 2487.2 a Estimates. Source: Direction générale des douanes.

Main trading partnersa (US$ m) 2000 2001 2002 2003 2004 Exports to: US 300.2 272.3 375.0 388.9 692.4 Netherlands 350.0 510.9 941.3 973.4 614.2 France 543.1 508.3 618.1 1045.2 570.6 Italy 170.6 155.6 187.6 188.2 330.3 Belgium - - - - 283.4 Germany 109.6 148.6 137.2 119.8 283.1 Spain 135.6 146.4 248.3 309.2 228.2 Nigeria 68.6 59.1 466.5 164.2 213.6 Equatorial Guinea 18.9 13.6 17.4 130.7 171.7 Ghana 134.4 165.1 106.0 124.2 163.2 Total exports 3,849.50 3,887.40 4,963.00 5,492.60 5,991.00 Imports from: France 505.2 537.1 556.8 1147.9 848.8 Nigeria 661.0 478.4 365.2 507.5 671.6 UK 56.6 82.8 64.5 246.5 138.6 China 66.6 75.8 62.6 122.9 138.4 Italy 92 115.1 121.2 110.8 134.4 Belgium - - - - 130.1 US 88.7 133.7 89.5 113.6 129.8 India 17.7 24.2 72.6 69.9 108.8 Germany 89.9 90.4 93.2 100.0 107.6 Netherlands 76.6 102.0 92.7 116.6 86.9 Total imports 2,733.80 2,794.30 2,595.20 3,515.90 3,495.30 a Based on partners' trade returns; subject to a wide margin of error. Source: IMF, Direction of Trade Statistics Yearbook.

Balance of payments, IMF series (US$ m) 2000 2001 2002 2003 2004 Goods: exports fob 3,888.0 3,945.9 5,274.8 5,787.7 6,902.1 Goods: imports fob -2,401.8 -2,417.8 -2,455.6 -3,230.9 -4,167.7 Trade balance 1,486.2 1,528.1 2,819.2 2,556.8 2,734.4 Services: credit 482.4 577.8 585.3 664.3 748.3 Services: debit -1,226.9 -1,271.3 -1,544.7 -1,780.1 -2,012.9 Income: credit 141.6 137.3 141.2 170.6 179.3 Income: debit -794.5 -723.1 -770.9 -830.1 -884.6 Current transfers: credit 79.4 88.5 131.9 196.4 202.9 Current transfers: debit -409.4 -398.7 -593.8 -683.3 -664.8 Current-account balance -241.2 -61.4 768.2 294.6 302.6 Direct investment in Côte d'Ivoire 234.7 272.7 212.6 165.3 174.5 Direct investment abroad 0.0 -2.0 -2.0 -2.0 0.0 Inward portfolio investment (incl bonds) -15.1 -15.8 -27.1 -41.7 -41.5 Outward portfolio investment 4.5 4.0 51.7 66.8 -1.3 Other investment assets -182.4 -129.1 -439.0 -341.7 -437.5 Other investment liabilities -404.3 -197.8 -828.6 -885.2 -818.7 Financial balance -362.6 -68.0 -1,032.4 -1,038.5 -1,124.5 Capital account nie credit 9.9 11.5 9.1 14.1 11.5 Capital account nie debit -1.4 -1.4 -0.8 -0.4 -2.7 Capital account nie balance 8.4 10.0 8.3 13.7 8.9 Net errors & omissions -10.3 35.0 -20.3 -53.8 32.2 Overall balance -608.3 -86.1 -278.4 -787.2 -780.8 Financing (– indicates inflow) Movement of reserves -37.5 -351.1 -844.3 559.4 -389.7 Use of IMF credit & loans 0.0 0.0 75.8 0.0 0.0

Source: IMF, International Financial Statistics.

Net official development assistancea (US$ m) 2000 2001 2002 2003 2004 Bilateral 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 -126.7 Total 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 estimates (US$ m unless otherwise indicated) 1999 2000 2001 2002 2003 Public & publicly guaranteed long- term debt 9,699 9,063 8,603 9,110 9,701 Official creditors 7,256 6,669 6,211 6,752 7,341 Bilateral 4,108 3,711 3,453 3,712 4,052 Multilateral 3,148 2,958 2,758 3,040 3,289 Private creditors 2,443 2,394 2,392 2,358 2,359 Banks 15 14 14 0 1 Private non-guaranteed 1,596 1,482 1,372 1,259 1,144 Short-term debt 1,256 1,043 1,179 932 917 Interest arrears on long-term debt 8 79 376 267 359 IMF credits 620 549 464 491 425 Total external debt 13,170 12,138 11,618 11,791 12,187 Long-term debt 11,295 10,546 9,975 10,369 10,844 Principal repayments 832 481 369 522 430 Interest payments 618 539 252 309 142 Short-term debt 70 74 34 26 18 Total debt service (paid) 1,449 1,020 621 831 572 Ratios (%) Total external debt/GNP 112.2 122.6 115.0 107.1 93.8 Debt-service ratioa 26.8 22.6 13.3 13.9 8.5 Short-term debt/total external debt 9.5 8.6 10.1 7.9 7.5 Concessional long-term loans/long- term debt 33.6 34.0 33.4 38.4 40.9 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.

Reserves (US$ m unless otherwise indicated; end-period) 2000 2001 2002 2003 2004 Foreign exchange 666.2 1,017.9 1,861.5 1,302.7 1,698.5 SDRs 1.3 0.7 1.2 0.3 0.2 IMF reserve position 0.3 0.3 0.4 0.6 0.6 Reserves excl gold 667.9 1,019.0 1,863.3 1,303.9 1,693.6 Golda - - - - - Other liabilities of the monetary authorities 0.5 6.6 16.3 8.9 10.8 a Since the start of 2003 the authorities have stopped reporting that Côte d'Ivoire has any gold reserves. Source: IMF, International Financial Statistics.

Exchange rates (CFAfr per currency unit) 2001 2002 2003 2004 2005 US$ (average) 733.0 697.0 581.2 528.3 527.5 US$ (end period) 744.3 625.5 519.4 481.6 556.0 SDR (end period) 935.4 850.4 771.8 747.9 794.7

Source: IMF, International Financial Statistics.

Editors: Juliette Grundman (editor); David Cowan (consulting editor) Editorial closing date: February 16th 2006 All queries: Tel: (44.20) 7576 8000 E-mail: [email protected]