ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 1 TRADE AND INVESTMENT OPPORTUNITIES IN AFRICA
COUNTRY FOCUS: COTE D’IVOIRE JUNE 2015
By: Ben Fugah and Tsidiso Disenyana 1
MANDATE To facilitate and encourage South African export trade by underwriting export credit loans and investments outside South Africa, which will help contractors win international capital goods and service contracts.
VISION To be leaders in the medium- and long-term export credit and investment insurance business, focusing on project finance underwriting, customer needs, and prudent portfolio and risk management.
MISSION To provide export credit and investment insurance solutions in support of South African Capital goods and services by applying best practice risk management principles.
The ECIC’s role in South Africa
The ECIC provides insurance that enables South African exporters to offer their services and products on the international market, with a particular focus on emerging markets in Africa that are considered too risky for conventional insurers. Its overarching goal – and its mandate from the South African government as its sole shareholder – is to make South African exporters attractive to international buyers to attract foreign income, stimulate local economic growth and create local jobs.
1 Respectively Head of Political, Economic Analysis and Research Unit and Senior Economist at ECIC
2 ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE TABLE OF CONTENTS
LIST OF ACRONYMS...... 3 1. INTRODUCTION...... 5
2. COTE D’IVOIRE MACROECONOMIC ENVIRONMENT AND POLICY...... 6 2.1 ECONOMIC STRUCTURE...... 9 2.2 RECENT ECONOMIC TRENDS...... 9 2.3 MACROECONOMIC POLICY FRAMEWORK...... 11 2.3.1 DEVELOPMENT PLAN...... 12 2.3.2 FISCAL POLICY...... 12 2.3.3 DEBT POLICY...... 13 2.3.4 EXTERNAL BALANCES...... 14
3. INVESTMENT ENVIRONMENT...... 16 3.1 OVERVIEW...... 16 3.2 LEGAL CONSIDERATIONS...... 17 3.2.1 OWNERSHIP REQUIREMENTS...... 17 3.2.2 CURRENCY CONVERSION AND TRANSFER RESTRICTIONS...... 17 3.2.3 EXPROPRIATION/NATIONALISATION/CONFISCATION...... 17 3.2.4 BREACH OF CONTRACTUAL OBLIGATIONS AND DISPUTE SETTLEMENT ...... 18 3.2.5 PROTECTION OF PROPERTY RIGHTS...... 18 3.2.6 PERFORMANCE REQUIREMENTS...... 19 3.3 FISCAL CONSIDERATIONS...... 19 3.3.1 TAXES...... 19 3.3.2 INCENTIVES...... 19
4. TRADE ANALYSIS...... 21 4.1 COMPOSITION AND DIRECTION OF TRADE...... 21 4.2 TRADE BETWEEN SOUTH AFRICA AND COTE D’IVOIRE...... 23 5. INVESTMENT TRENDS...... 25 5.1 COMPOSITION AND DIRECTION OF FOREIGN DIRECT INVESTMENT...... 25 5.2 SOUTH AFRICAN INVESTMENT FOOTPRINT IN COTE D’IVOIRE...... 26
6. KEY INVESTMENT SECTORS...... 28 6.1 NATURAL RESOURCES...... 28 6.1.1 OVERVIEW...... 28 6.1.2 POLICY AND REGULATORY FRAMEWORK...... 30 6.1.3 KEY SECTOR CHALLENGES AND RISKS...... 30 6.1.4 UPCOMING PROJECTS AND OPPORTUNITIES...... 31 6.2 INFRASTRUCTURE - ELECTRICITY...... 32 6.2.1 OVERVIEW...... 32 6.2.2 POLICY AND REGULATORY FRAME WORK...... 35 6.2.3 KEY SECTOR CHALLENGES AND RISKS...... 36 6.2.4 UPCOMING PROJECTS AND OPPORTUNITIES...... 36
3 ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE TABLE OF CONTENTS
6.3 INFRASTRUCTURE – TRANSPORT...... 38 6.3.1 OVERVIEW...... 38 6.3.2 POLICY AND REGULATORY FRAMEWORK...... 39 6.3.3 KEY SECTOR CHALLENGES AND RISKS...... 41 6.3.4 UPCOMING PROJECTS AND OPPORTUNITIES...... 43 6.4 INFRASTRUCTURE – WATER AND SANITATION...... 43 6.4.1 OVERVIEW...... 43 6.4.2 POLICY AND REGULATORY FRAMEWORK...... 43 6.4.3 KEY SECTOR CHALLENGES AND RISKS...... 44 6.4.4 UPCOMING PROJECTS AND OPPORTUNITIES...... 44 6.5 INFRASTRUCTURE – INFORMATION AND COMMUNICATION TECHNOLOGIES...... 45 6.5.1 OVERVIEW...... 45 6.5.2 POLICY AND REGULATORY FRAMEWORK...... 47 6.5.3 KEY SECTOR CHALLENGES AND RISKS...... 48 6.5.4 UPCOMING PROJECTS AND OPPORTUNITIES...... 48 6.6 INFRASTRUCTURE – REAL ESTATE...... 49 6.6.1 OVERVIEW...... 49 6.6.2 POLICY AND REGULATORY FRAMEWORK...... 49 6.6.3 KEY SECTOR CHALLENGES AND RISKS...... 50 6.6.4 UPCOMING PROJECTS AND OPPORTUNITIES...... 50 6.7 TOURISM...... 55 6.7.1 OVERVIEW...... 52 6.7.2 POLICY AND REGULATORY FRAMEWORK...... 53 6.7.3 KEY SECTOR CHALLENGES AND RISKS...... 54 6.7.4 UPCOMING PROJECTS AND OPPORTUNITIES...... 54
7. CONCLUDING REMARKS...... 55
8. ANNEXURES...... 57 8.1 COTE D’IVOIRE GEOGRAPHICAL DISTRIBUTION OF ECONOMIC ACTIVITY...... 57 8.2 COTE D’IVOIRE SHARE OF INTRA-REGIONAL TRADE IN WEST AFRICA...... 58 8.3 ELECTRICITY DISTRIBUTION NETWORK OF COTE D’IVOIRE...... 59 8.4 TRANSPORT NETWORK OF COTE D’IVOIRE...... 60 8.5 PORT OF SAN PEDRO CONTAINER TERMINAL EXPANSION...... 61 8.6 AFRICAN UNDERSEA CABLES...... 62
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 4 LIST OF ACRONYMS
ACE AFRICAN COAST TO EUROPE ANAC AUTORITÉ NATIONALE DE L’AVIATION CIVILE AFDB AFRICAN DEVELOPMENT BANK ANARE AUTORITE NATIONALE DE REGULATION DU SECTEUR ELECTRICITE ANSUT AGENCE NATIONALE DU SERVICE UNIVERSEL DES TÉLÉCOMMUNICATIONS ARTCI AUTORITÉ DE RÉGULATION DES TÉLÉCOMMUNICATIONS DE CÔTE D’IVOIRE BMI BUSINESS MONITOR INTERNATIONAL CBD CENTRAL BUSINESS DISTRICT CEPICI CENTRE IVOIRIEN DE PROMOTION DES INVESTISSEMENTS EN CÔTE D’IVOIRE CIE COMPAGNIE IVOIRIENNE D’ELECTRICITÉ CIPREL COMPAGNIE IVOIRIENNE DE PRODUCTION D’ELECTRICITÉ EIA ENERGY INFORMATION ADMINISTRATION FDE FONDS DE DÉVELOPPEMENT DE L’EAU FDI FOREIGN DIRECT INVESTMENT GDP GROSS DOMESTIC PRODUCT ICT INFORMATION AND COMMUNICATION TECHNOLOGY IMF INTERNATIONAL MONETARY FUND IPP INDEPENDENT POWER PRODUCER KM KILOMETRE KV KILOVOLT MT METRIC TONNES MW MEGAWATTS NDP NATIONAL DEVELOPMENT PLAN OECD ORGANISATION FOR ECONOMIC COOPERATION AND DEVELOPMENT OIPI IVORIAN INTELLECTUAL PROPERTY OFFICE PETROCI PÉTROLIÈRES DE CÔTE D’IVOIRE SODECI SOCIÉTÉ DE DISTRIBUTION D’EAU DE LA CÔTE D’IVOIRE SODEXAM SOCIETE D’EXPLOITATION ET DE DEVELOPPEMENT AEROPORTUAIRE, AERONAUTIQUE ET METEOROLOGIQUE SOGEPE SOCIETE DE GESTION DU PATRIMOINE DU SECTEUR ELECTRICITE SOPIE SOCIETE D’OPERATION IVORIENNE D’ELECTRICITE TEU TWENTY-FOOT EQUIVALENT UNITS UNIDO UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION UNCTAD UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT UNDP UNITED NATIONS DEVELOPMENT PROGRAMME VAT VALUE ADDED TAX VOIP VOICE OVER INTERNET PROTOCOL WACS WEST AFRICA CABLE SYSTEM WAEMU WEST AFRICAN ECONOMIC AND MONETARY UNION WAPP WEST AFRICAN POWER POOL WEF WORLD ECONOMIC FORUM WTO WORLD TRADE ORGANISATION
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 5 ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 6 1. INTRODUCTION
Côte d‘Ivoire is recovering steadily from the post-election conflict. For the past few years the country has been among the top fastest growing economies in the world and is considered one of the most vibrant in West Africa. Its economy has been growing at approximately 6.4 percent for the past decade.
In 2013 Côte d’Ivoire had a GDP of US$28 billion and a population of 24 million people translating into a GDP per capita of US$1,840 in terms of purchasing power parity. This placed the country as a low middle income and ahead of Ethiopia (US$1,259), Uganda (US$1,460), Sierra Leone (US$1,560) and Tanzania (US$1,567)2.
The current government has pushed through a number of reforms (including tax breaks, regulatory and institutional changes) in order to create an attractive business climate. These reforms have been able to attract a number of investments across a number of sectors including in the extractive, transport and services sectors. To this end, foreign direct investment (FDI) has grown at an annualized rate of 10.9 percent since 20113.
The short to medium term prospects for political stability and economic growth are positive. The government is working to improve long-term political stability by addressing unresolved issues related to the reconciliation process, including security, land reform, election reform, and the repatriation of refugees. Economically, the country has adopted a national strategy that envisages upliftment of the country to a group of frontier economies by 2020.
Despite its challenges, Côte d‘Ivoire is considered as one of the best spots in Africa for business growth and opportunities. Its natural resources, strategic position within the region, and an overall improvement in the business environment provide export and investment opportunities for South African companies.
2 IMF World Economic Outlook Database. Accessed at http://www.imf.org/external/pubs/ft/weo/2013/01/weodata/index.aspx 3 UNCTAD statistics and ECIC calculations.
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 7 ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 8 2. COTE D’IVOIRE MACROECONOMIC ENVIRONMENT AND POLICY
2.1 ECONOMIC STRUCTURE Key industries included wholesale and retail (including accommodation and leisure) and government The primary sector accounted for 34.0 percent of the services. Both industries accounted for 28 percent national Gross Domestic Product (GDP) in 2013, with of the services sector’s output. agricultural activity the most important contributor, followed by mining activities. Agriculture is an 2.2 RECENT ECONOMIC TRENDS important sector for the country and is responsible for 40.0 percent of export earnings and employs For the past decade, sustained growth in the face of approximately 60 percent of the population4. Key political crises has characterized the macroeconomic agricultural crops include cocoa, coffee, cashews, performance of Côte d’Ivoire. The country has cotton and palm oil. In particular, Côte d‘Ivoire is experienced an average growth rate of 6.4 percent the leading world producer of cocoa (contributing between 2004 and 2013. Growth has been sustained 40 percent of global production); the second largest by export-oriented activities in the agricultural sector global producer and leading global exporter of and public investment in infrastructure projects8. cashew nuts; the leading African producer of rubber, bananas and coffee; the second largest African Robust growth is expected to continue over the producer of palm oil; and the fourth largest African next five years, with a projected average real GDP producer of cotton5. growth rate of 9.1 percent. This will be buoyed by the continuing government capital infrastructure The predominance of the sector explains why 8.5 investment, upsurge in agricultural growth due percent of investment has been earmarked for the to reform in the cocoa and coffee industries as sector under the National Development Plan (NDP)6. articulated under the NDP, a growth in extractive industries’ production and the expected rise in FDI. Côte d‘Ivoire’s mineral potential, although largely However, risks to economic growth will revolve underexploited, is of growing importance and is around downturns in external demand and weaker perceived a key sector that can play an important world commodity prices, political instability and role in the development of the country. Figure 1 inadequate leveraging of external financing to shows the structure of Côte d‘Ivoire’s economy in 2013. implement projects under the NDP. The secondary sector contributed approximately 23 percent to the national GDP in 2013, with Annexure 8.1 illustrates the geographical distribution manufacturing the dominant industry in the sector. of Côte d’Ivoire’s economic activities across the country. The industry includes food processing, beverages, oil refining, textiles, wood products, fertilizers and building materials. The contribution of the services sector to the country’s national output was 43.0 percent in 2013.
5 Brou J (2014). Industrial and Mining Policy for an Emerging Côte d’Ivoire. Abidjan, 10 July 2014 6 World Bank (2013). Republic of Côte d’Ivoire: Joint IDA-IMF Staff Advisory Note on the National Development Plan 2012-15, Report No. 77895-CI. World Bank, Washington D.C. 8 IMF (2014). World Development Indicators – Cote d’Ivoire. IMF. Washington D.C
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 9 Figure 1: Structure of Madagascar’s Economy (2013)
Source: African Development Bank (AfDB), Organisation for Economic Co-operation and Development (OECD) and United Nations Devel- opment Programme (UNDP)7
Figure 2: Côte d’Ivoire economic outlook (2004-2019)
45.0 37.3 40.7 40.0 34.2 31.1 35.0
28.3
30.0 24.6 s
n 24.1 o
i 25.0 23.5 23.0 l
l 22.5 i
b 19.8
$ 20.0 16.4 17.4
S 15.5 U 15.0
10.0
5.0
0.0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Source: IMF World Development Indicators, April 2014
7 Yembilini P, Traoré B, Padilla L (2014). African Economic Outlook – Cote d’Ivoire. AfDB, OECD and UNDP. Abidjan, Paris and New York
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 10 2.3 MACROECONOMIC POLICY FRAMEWORK
2.3.1 Development Plan
The 2012-2015 National Development Plan serves as an overarching framework for the government’s development strategy. The main objective of the NDP is to transform the economy of Côte d’Ivoire and secure emerging market status by 20209.
The strategy positions Côte d’Ivoire as a gateway However, the risk to the implementation of the NDP to the vast West African market and reinforces is the perceived weak absorptive capacity of the regional economic development in many areas by Ivorian government, i.e. the current administration providing a favourable investment environment capacity to implement projects planned under the (Annexure 8.2 depicts the share of Côte d’Ivoire in strategy, deliver on the key reforms and achieve West Africa’s intra-regional trade). As an essential tangible results during the NDP cycle. In addition, to economic and national transformation, Côte leveraging external financing to implement projects d’Ivoire has put infrastructure development at under the plan is also considered a key risk. the heart of its strategy. Economic infrastructure including energy, water, transport and other heavy industries are outlined as key areas of investment, while social infrastructure such as schools and hospitals will also receive attention, in line with the government’s ‘pro-poor’ agenda.
The programme will be financed through a combination of public and private financing, with the government looking to the public-private partnership market to further fund infrastructure projects10. The Plan further aims to move the country’s agricultural sector up the value chain, by ensuring primary sector products are transformed domestically prior to export. Given the country’s status as a leading cocoa producer, it is hardly surprising that this is a priority sector for increased processing activities.
9 World Bank (2013). op.cit. 10 ibid
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 11 2.3.2 Fiscal Policy
The authorities have implemented prudent fiscal policies since 2011, characterized by a reduction in the fiscal deficit and an increase in public investment. Although fiscal revenue has been on the rise and is expected grow in the medium term, the tax base has been slightly eroded by incentives con- tained in the investment code (see Section 3.3).
Table 1 shows that government spending has been on the rise, driven by demands for higher wages for civil servants and infrastructure investment under the auspices of the NDP. The resultant fiscal deficit is expected to be financed from internal and external sources and borrowings from the regional and international financial market. Table 1: Public finances (percentage of GDP)
NOTE: E = ESTIMATE; P = PROJECTION SOURCE: AFDB, OECD AND UNDP (2014)
Source: AfDB, OECD and UNDP (2014)
Rising public expenditure and high exposure to volatile commodity prices mean that any significant deterioration of investor sentiment or political stability could lead to difficulties financing the fiscal deficit. The risks for commodity prices are currently hedged through forward sales contracts, in order to limit the impact of any significant unexpected price volatility.
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 12 2.3.3 Debt Policy
Côte d’Ivoire has benefited tremendously under the Highly Indebted Poor Countries Initiative and other debt relief schemes. The country’s risk of debt distress is currently considered moderate considering that public external debt fell from 73.4 percent of GDP at the end of 2006 to 20.0 percent at the end of 2013 (see Figure 3).
Debt service as a percentage of GDP has also The strategy aims to tap concessional external declined from a high of 24.4 percent in 2011 to loans and use public-private partnerships while 10.4 percent in 2013 – and is projected to decline keeping costs to a minimum. The main risk to further in the medium term11. The government has Côte d’Ivoire’s external debt situation would be a also successfully restructured its domestic debt by devaluation of the CFA franc, which would instantly extending due dates and leveraging resources on increase debt relative to public revenue, given that the regional financial market. This has paved the about two-thirds of public debt is denominated in way for further government lending, particularly foreign currency. for major infrastructure projects. A currency devaluation would significantly increase This has been underlined by the country’s successful the cost of servicing the debt during the entire term issue of a US$750 million and US$1 billion Eurobonds of the loan. This risk cannot be ruled out given the in July 2014 and February 2015, respectively 12. To ongoing large aggregated current account deficit strengthen debt sustainability, the government with in the West African Economic and Monetary Union the International Monetary fund (IMF) and World (WAEMU) zone, albeit it is offset by FDI inflows. This Bank support, has established a comprehensive situation has occurred in 1994, when there was a debt management strategy to handle domestic 50 percent devaluation of the CFA franc relative to and foreign debts and new borrowing. the French franc13.
Figure 3: Stock of total external debt (% of GDP) and debt services (% of exports of goods and services)
73.4 Total external debt/GDP Debt service/Exports 80 73.2 69.3 70
60 55.8 52.1 50
40 49.8 45.8 24.9 20.0 30 16.3 14.1 17.2 14.1 20 24.1 10.9 11.9 10.4 10.7 9.3 12.3 10.6 10 8.4 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Source: AfDB, OECD and UNDP (2014)
11 Yembilini P et al (2014). Op. cit. 12 Aboa A. and Bavier J. Ivory Coast $1 bln Eurobond nearly four times oversubscribed. Sharenet, 26 February 2015. 13 IMF (1995). Annual Report 1995. IMF. Washington D.C.
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 13 2.3.4 External Balances
According to Table 2, the 2011 political turmoil has resulted in an increasing current account deficit from 2012 onwards, after preceding years of surpluses. The increased account deficit is the result of the combined effects of a surge in investment-related imports and the drop in global demand for commodities. This deficit was partly financed by an increase in foreign direct investment (see Section 5.1). The current account is projected to rise to 7.2 percent of GDP in 2014 before slightly declining to 6.8 percent of GDP in 2015. Reflecting the deterioration of the current account, the monetary situation is characterized by a contraction in the import cover, from 4.0 months in 2012 to 3.7 months in 2013. Table 2: Current account
Source: AfDB, OECD, UNDP, IHS and IMF
With the expected rise of the extractive sector (see Section 6.1), the current-account volatility of the cocoa sector will be somewhat cushioned. Although this will allow Côte d’Ivoire to accumulate greater foreign reserves and create new sources of foreign revenue beyond cocoa, this will not reduce the country’s exposure to volatile commodity prices. Nonetheless, Côte d’Ivoire’s external vulnerability is considered very low. A balance of payments crisis is extremely unlikely due to its membership in WAEMU, in which the CFA franc’s convertibility is guaranteed by the French Treasury based on fixed exchange rate with the euro.
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 14 ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 15 3. INVESTMENT ENVIRONMENT
3.1 OVERVIEW
The Centre Ivoirien de Promotion des Investissements en Côte d’ivoire (CEPICI) co-ordinates government initiatives and actions related to investment promotion and private sector development. The functions of CEPICI include, among others, centralization and facilitation of administrative formalities related to business creation, modification and dissolution and facilitation of the formalities for granting the benefits of the Investment Code.
Since 2012, the authorities have made From the standpoint of global competitiveness, considerable progress in improving the business Côte d’Ivoire is ranked 131st out of 144 countries climate by simplifying and accelerating the according to the World Economic Forum’s (WEF) process for incorporating companies, creating a Global Competitiveness Index14. commercial tribunal, streamlining regulations, and lowering various transaction fees, (e.g. for The pace of business reform is expected to be opening up a business and registering real estate expanded and enforced as the government extends transfers). its efforts to attract foreign investment. The authorities have already pushed through revamped These efforts led to a significant improvement in Mining, Petroleum and Tourism Investment Codes Côte d’Ivoire’s ranking in the World Bank’s Doing in their quest to attract further investment in these Business survey, whereby the country was ranked sectors. 177th out of 185 countries in 2015 (see Table 3). This highlights a very positive trend meaning that the new regulations and measures taken by the government under the investment new code are paying off.
Table 3: Doing Business in 2014 and 2015 (Rank)
Source: World Bank Doing Business (2014 and 2015). Doing Business 2015: Côte d’Ivoire. World Bank. Washington D.C.
14 WEF (2014). GLOBAL COMPETITIVENESS REPORT 2014-2015. WEF. GENEVA.
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 16 3.2 LEGAL CONSIDERATION The WAEMU has unified foreign exchange regulations. Under these regulations, there are no restrictions for transfers within the 3.2.1 Ownership Requirements community, and designated commercial banks are able to approve routine foreign exchange The Ivoirian government actively encourages transactions inside the community. foreign investment through mergers, acquisitions, joint ventures, takeovers, or startups. There are no However, there are capital controls between significant limits on foreign investment nor are the zone and the rest of the world. In particular, there differences in the treatment of foreign and the regional central bank reserves the right to national investors, either in terms of the level of compel private and public institutions within the foreign ownership or sector of investment. The area to redeem their foreign-currency holdings government does not screen investments and has in return for CFA francs. Export revenue, for no overall economic and industrial strategy that example, have to be repatriated and converted to discriminates against foreign-owned firms. CFA francs17.
There are no laws specifically authorizing private firms 3.2.3 Expropriation/Nationalisation/ to adopt articles of incorporation or association that Confiscation limit or prohibit foreign investment, participation, or control, and no such practices have been reported. There have not been any cases of government However, there are restrictions on foreign investment expropriation of private property in Côte d’Ivoire in the health sector, law and accounting firms, and in recent years. General risks of expropriation are travel agencies. Investments in these sectors are mitigated by the government’s fear of damaging subject to prior approval and require appropriate investor sentiment at a time when foreign capital is licenses and association with an Ivoirian partner15. seen as critical to promoting growth and rebuilding the economy18. 3.2.2 Currency Conversion and Transfer Restrictions
Côte d’Ivoire is a member of WAEMU, which uses the Franc CFA, a convertible currency. The French Central Bank continues to hold the international reserves of WAEMU member states and maintains a fixed rate of CFA to the euro16. The currency peg to the euro means that the CFA franc is guaranteed by the French Treasury. The peg is expected to be maintained, as any devaluation would damage the Franc Zone’s reputation as a trade and investment destination.
15 ECIC meeting with CEPICI and Ministry of Industry and Mines, 9-13 March 2015. Abidjan, Côte d’Ivoire 16 US Department of State (2014). 2014 Investment Climate Statement. US Department of State. Washington D.C. 17 ECIC meeting with Côte d’Ivoire Chamber of Commerce and Industry, 9-13 March 2015. Abidjan, Côte d’Ivoire 18 ECIC meeting with CEPICI and Ministry of Industry and Mines, 9-13 March 2015. Abidjan, Côte d’Ivoire.
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 17 3.2.4 Breach of Contractual Obligations and In urban areas, it can still be difficult to obtain a free- Dispute Settlement hold deed to property even years after a closing. For that reason, most individuals and businesses tend Côte d’Ivoire is a member of the International to sign long-term leases. Although the legal system Center for Settlement of Investment Disputes. The recognizes the right to contract for leaseholds in Abidjan-based regional Joint Court of Justice and both urban and rural areas, in most cases traditional Arbitration provides an alternative means of solving tribal landowners do not have a clear understanding contractual disputes. of property rights21.
The judicial system is generally seen as biased, but Côte d’Ivoire is a member of the World Intellectual the government is working to restore its credibility Property Organisation and is a signatory to the and improve efficacy. In January 2012, the Council World Trade Organisation (WTO) Trade-Related of Ministers established a Commercial Court to Aspects of Intellectual Property Rights agreement specifically handle business cases. According to the on trade related aspects of intellectual property. The US Department of State, in April 2013, the authorities country is also a party to the Paris Convention and sanctioned a draft law to consolidate the autonomy the Bangui Agreement covering 16 Francophone and extend the attributions of the Commercial Court African countries in the African Intellectual Property to create the Commercial Chamber of the Court of Organization (OAPI). Under OAPI, rights registered Appeals. According to the US Department of State, in one member country are valid in Under OAPI, the Ivorian government further authorized a draft rights registered in one member country are valid law in early 2014 on the judiciary and conventional in other member states. mediation, which establishes mediation throughout the Ivoirian legal framework in order to complete Patents are valid for ten years, with the possibility of the services provided by the Commercial Court and two five-year extensions. Trademarks are valid for ten the Arbitration Tribunal19. years and are renewable indefinitely. Copyrights are valid for 50 years22. The Ivorian Office of Intellectual 3.2.5 Protection of Property Rights Property (OIPI) is responsible for administering the intellectual property system in Côte d’Ivoire. The Ivoirian civil code provides for enforcement of OIPI is the national liaison structure for the OAPI and private property rights. The concept of mortgages serves as the focal point for applications for patents, exists, but mortgage lending is not well developed. utility models and property rights (trademarks, Property and title registration systems exist in Côte industrial designs and trade names) received from d‘Ivoire, but in practice are only used in urban within Côte d’Ivoire23. areas. The legal system protects and facilitates the acquisition and disposition of all property rights, including land, buildings, and mortgages20.
Outside of urban areas, private individuals or entities usually cannot obtain freehold tenure because traditional property rights of villages and ethnic groups prevent the land from being sold.
19 US Department of State (2014). op.cit. 20 ECIC meeting with HC Capital Properties, 9-13 March 2015. Abidjan, Côte d’Ivoire. 21 US Department of State (2014). op.cit. 22 US Department of State (2014). op.cit. 23 ECIC meeting with CEPICI and Ministry of Industry and Mines, 9-13 March 2015. Abidjan, Côte d’Ivoire.
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 18 3.2.6 Performance Requirements Taxes on mining and information, communication and technologies (ICT) sectors are levied at 30 Côte d’Ivoire does not maintain any regulations percent. Moreover, companies operating in the inconsistent with WTO Trade-Related Investment ICT sector are also required to invest 20 percent Measures. The agreements states that no Member of their transfers and dividends paid outside Côte of the WTO shall apply measures that are prohibited d‘Ivoire in Ivoirian treasury bonds27. by the provisions of General Agreement on Trade and Tariffs Article III (national treatment) or Article XI 3.3.2 Incentives (quantitative restrictions)24. Examples of inconsistent measures include, for example, local content or In addition to tax reductions, the country’s trade balancing requirements. investment code has a three tiered zoning system that provides investors with zones where In Côte d’Ivoire there are no general performance investors are exempt from corporate tax law for requirements applied to investments, nor does the five to fifteen years, depending on the location of government or the investment authority generally the investment. place conditions on location, local content, equity ownership, import substitution, export requirements, For example, the exemptions are granted for five host country employment, technology transfer, or years in the Abidjan area and for eight years in the local financing25. rest of the country for five to 15 years depending on the place of the investment. In this context, 3.3 FISCAL CONSIDERATIONS the smaller the location, the bigger the benefits28.
3.3.1 Taxes The code also provides incentives to promote sectors that are key to the country’s economic Cote d’Ivoire’s investment code offers a variety of development including low-cost housing tax incentives in a bid to attract substantial FDI construction, the creation of factories and and stimulate economic growth. Some of the infrastructure development. There are also tax incentives include a reduction in the corporate tax incentives granted under the Petroleum Code rate from 35 percent to 25 percent and a provision and the Mining Code for enterprises involved in for three-year corporate income tax exemptions mining and petroleum activities. and free tax registration for companies that left the country during periods of political instability These codes provide exemption from VAT and and intend returning. additional taxes on imports and purchases to companies involved in exploration or production Other significant post-conflict tax incentives offered of oil, gas or minerals through the means of an include a 50 percent reduction in trade and land agreement with the government. tax, exemptions from Value Added Tax (VAT) on equipment for private investors, and the cancellation These are explained further in section 6.1.2. of income tax arrears.
Capital gains are normally taxed at full corporate rates. However, the tax on capital gains, exclusive of recaptured depreciation, can be deferred if the gain is reinvested within three years26.
24 WTO (undated). Agreement on Trade Related-Investment Measures. WTO. Geneva. (accessed at http://www.wto.org/english/ docs_e/legal_e/18-trims.pdf 25 Ibid 26 Ruelle J., Hamilton N. (2014). Ivory Coast Fiscal Guide 2013/14. KPMG. London 27 ECIC meeting with Ministry of Economy and Finance, 9-13 March 2015. Abidjan, Côte d’Ivoire, and PricewaterhouseCoopers (2014). Worldwide Tax Summaries - Corporate Taxes 2014/15. PwC. London 28 ECIC meeting with CEPICI and Ministry of Industry and Mines, 9-13 March 2015. Abidjan, Côte d’Ivoire
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 19 Table 4: Rate of taxation in Côte d’Ivoire by category
Source: Ruelle J., Hamilton N. (2014). Ivory Coast Fiscal Guide 2013/14. KPMG. London
Cote d’Ivoire’s investment code
in a bid to attract substantial FDI and stimulate economic growth.
Côte d’Ivoire does not maintain any regulations inconsistent with WTO Trade-Related Invest- ment Measures.
From the standpoint of global
competitiveness, Côte d’Ivoire is ranked 131st out of 144 coun- tries according to the World Economic Forum’s (WEF) Global Competitiveness Index14.
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 20 4. TRADE ANALYSIS
4.1 COMPOSITION AND DIRECTION OF TRADE
Over the past few decades, there has been a steady rise in Côte d’Ivoire’s trade in comparison the rest of the world, as illustrated in Figure 4. Barring a dip in 2011, trade has continually risen, reaching US$23.6 billion in 2013. The propensity to import has been on the increase (in light of the country’s infrastructure investment), with the country registering an 8.6 per cent growth rate over the past 10 years.
Figure 4: The direction of Côte d’Ivoire trade with Rest of World (2004 – 2013)
14 000 12 000
10 000
8 000 s n 6 000
illio Total Exports
m 4 000 $
S Total Imports U 2 000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: United Nations Conference on Trade and Development (UNCTAD) stats and ECIC calculations
Figure 5 shows that Côte d’Ivoire tends to export agriculture and raw materials. Agricultural products constituted about 40.5 percent of total export basket in 2013. Key export products include cocoa, coffee, cotton, timber, bananas, pineapples, fish and palm oil. Petroleum and petroleum products accounted for approximately 29.1 percent of the country’s total exports.
Figure 5: Côte d’Ivoire exports by product
Source: UNCTAD stats and ECIC calculations
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 21 Figure 6 shows that the top 10 export destinations accounted for approximately 31.2 percent of Côte d’Ivoire’s exports in 2013. Ghana is the country’s largest destination for exports. The country’s second largest export destinations are the Netherlands and Nigeria. Other euro zone countries such as Germany, France and Belgium are also key export destinations. In Africa, Nigeria, Gabon, Burkina Faso and South Africa form part of the largest export destination for the country.
Figure 6: Côte d’Ivoire exports by country (2013)
Source: UNCTAD stats and ECIC calculations
According to Figure 7, Nigeria is Côte d’Ivoire’s largest source of imports – mainly due to purchases of crude oil to supply domestic refinery activities. The country’s imports from Nigeria grew from US$508 million in 2004 to US$3.2 billion in 2013 – a compound growth rate of 9.5 percent. France and China were also the largest sources of imports for Côte d’Ivoire. Figure 7: Côte d’Ivoire imports by country (2013)
Source: UNCTAD stats and ECIC calculations
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 22 Figure 8 shows the composition of Ivorian imports from the rest of the world by value for 2004-2013. Due to the weakness of its industrial base, Côte d’Ivoire tends to import manufactured and other high value-added products. Data from the United Nations Conference on Trade and Development (UNCTAD) shows that in 2013, refined oils constituted over 22.5 percent of the country’s imports from the rest of the world. This was followed by machinery and transport equipment (22.3 percent), chemicals (13.4 percent), and other manufactured goods (10.7 percent).
Figure 8: Côte d’Ivoire imports from Rest of World by product group
Source: UNCTAD stats and ECIC calculations
Côte d’Ivoire capital equipment imports constituted, on average, 38.2 percent of the country’s total import basket for the past 10 years. The demand for capital equipment has grown at approximately 5.7 percent per annum for the past decade and it is expected to continue to grow buoyed by government investment in infrastructure projects.
4.2 TRADE BETWEEN SOUTH AFRICA AND COTE D’IVOIRE
Despite a dip in 2009, trade between Côte d’Ivoire and South Africa has shown a steady growth over the past decade (Figure 9), posting an average growth of 26.5 percent. Since 2011, the trade balance has been in favour of South Africa, with the latter exporting more than it is importing from Côte d’Ivoire.
Figure 9: The direction of Côte d’Ivoire trade with SA (2004 – 2013)
400 000 350 000
300 000
250 000
200 000 Total Exports
150 000 Total Imports
US$ 000 100 000 50 000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: UNCTAD stats and ECIC calculations
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 23 According to Figure 10, Côte d’Ivoire tends to import manufactured goods from South Africa. These in- clude chemicals and related products, machinery and transport equipment, and manufactured goods. The surge in imports from South Africa over the past decade was estimated at 11.2 percent, showing a sustained demand for South African products.
Figure 10: South Africa exports to Côte d’Ivoire by product group
Source: UNCTAD stats and ECIC calculations Côte d’Ivoire capital equipment imports from South Africa increased from US$17.5 billion in 2004 to US$42.6 billion in 2013 – an average annual increase of 16.6 percent over the period. As a result, the share of capital equipment imports as a percentage of total imports from South Africa also increased from 38.1 percent in 2004 to approximately 54.9 percent in 2013. This shows that there has been a sustained demand for South African capital equipment by Côte d’Ivoire.
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 24 5. INVESTMENT TRENDS
5.1 COMPOSITION AND DIRECTION OF FOREIGN Moreover, the country’s openness to foreign DIRECT INVESTMENT investment, its vast natural resources and latent economic potential, means that foreign investors will look increasingly to the country for profitable Foreign interest in Côte d’Ivoire has been on the opportunities. The country further serves as rebound since the political crisis of 2011. FDI a gateway to the regional market. The laissez inflows to Côte d’Ivoire grew to US$371 million in faire investment code, as well as concerted 2013, a rise of 15.2 percent over the previous year, government efforts to improve the business and have grown at a compound rate of close to environment, should ensure that Côte d’Ivoire 10.9 percent since 2011 (as shown in Figure 11). becomes an ever more welcoming destination Forecasts for continued strong GDP growth in the for foreign investors. short to medium term, coupled with significant plans for additional spending on major economic infrastructure projects, suggest that the Ivorian market will become increasingly attractive to foreign investment.
Figure 11: FDI inflows in Côte d’Ivoire (2004 – 2013) 500
450 446.1 426.8 400 371.1 377.1 350 318.9 338.9 311.9 301.6 322.1 300
250 283
200
150
100
50
0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: UNCTAD stats and ECIC calculations
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 25 The FDI trend has been dominated by flows 5.2 SOUTH AFRICAN INVESTMENT FOOTPRINT IN to the telecommunications industry (about 28 COTE D’IVOIRE percent). Besides ICT activities, the other leading investment sectors are real estate (19 percent), South Africa does not have a significant FDI footprint manufacturing (17 percent), services (10 percent), in Côte d’Ivoire. The current FDI stock in the country other industrial activities (10 percent), and hospitality is limited to financial services, transport, mining and accommodation (8 percent)29. and ICT sectors.
According to Figure 12 France has been the In the financial services, Standard Bank opened predominant foreign investor in Côte d’Ivoire new offices in 2014 with a view to use the country over the past few years. The French investment as a gateway to expand its service offering across has accounted for about 60 to 70 percent of the the Francophone region. MTN Group is one of the total stock of foreign investment capital in the largest mobile operators in the ICT sector in Côte country. Among other large investments, French d’Ivoire, with approximately 37 percent of the companies currently own the national electric market share31. South African Airways provides air utility company and the public water utility. They transport services between South Africa and Côte also manage a portion of the Port of Abidjan, the d’Ivoire. In the mining sector Randgold Resources Felix Houphouet-Boigny International Airport, and has invested US$ 425 million to operate the Tongon the country‘s only railroad. A French company gold mine since 201032. maintains a controlling interest in the country‘s national telecommunications provider and is a major force in wireless telecommunications. Other markets with a significant investment stock in Côte d’Ivoire include Switzerland (18.3 percent), US (5.9 percent), Belgium (3.4 percent) and China (2.0 percent).
Figure 12: FDI stock by country (2003-2012) 30
Source: UNCTAD
29 Presentation by Solange Amichia, Deputy Director General of CEPICI. Business Environment and Investment Opportunities in Côte d’Ivoire, September 2014. 30 Latest data on FDI inflows and stock by country and sector is non-exist 31 BMI Research 2015 ICT industry data. 32. ECIC meeting with SA Embassy officials, 9-13 March 2015. Abidjan, Côte d’Ivoire and The Africa Report (2014). Investing Côte d‘Ivoire 2014. The Africa Report - Groupe Jeune Afrique. Paris
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 26 ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 27 6. KEY INVESTMENT SECTORS
6.1 NATURAL RESOURCES Other companies involved in the gold mining activities include Amara Mining (which plans to invest $400 million in Yaoure gold mines) and 6.1.1 Overview LaMancha Resources37. a. Mining and metals Manganese has developed strongly over the past few years. Production rose from 120,000 tonnes in Côte d‘Ivoire‘s has a significant mining wealth, 2012 to 254,000 tonnes in 2013, and the authorities including gold, copper, iron ore, manganese, bauxite, expect it to increase to 460,000 tonnes in 2016 due and diamonds. The country has an estimated to the opening of three mines38. Société d’Etat pour potential of over 4 billion tonnes of iron ore, 300 le Développement Minier de Côte d’Ivoire (State million tonnes of nickel, 1.2 billion tonnes of bauxite, Mining Corporation for the Development of Côte 6 million tonnes of manganese, 90 million tonnes of d’Ivoire) has a joint venture with China National gold and 5 million carats of diamonds33. However, Geological and Mining Corporation for the mining the reserves remain largely underexploited, although of manganese at the Mokta mine in Lauzoua. Other this is beginning to change. Five mines are scheduled companies active in manganese sub-sector include to operate by the end of 2015 and 130 exploration Dhami Sampda, an Indian mining company, which permits were granted in 2014, as investors looked holds bauxite assets and was awarded an exploration for opportunities in the extractive industry. permit to mine iron ore39.
The country produced an estimated 17.0 tonnes As for other minerals, nickel, copper and iron ore per annum of gold in 2014, which is expected to exploration hold promise as well. Sama Resources increase to 20.1 tonnes per annum in the wake discovered reserves of 17.6 million tonnes containing of new companies entering the market. New nickel, copper, cobalt, palladium, platinum and gold companies such as Perseus Mining and Endeavour traces at the Samapleau project40. Tata Steel projects Mining are both advancing with gold mining in Mount Gao and Mount Nimba, respectively have projects. For example, the former has commenced an estimated 600 million and 1 billion tonnes of iron with development works on its US$160 million ore reserves41. In 2013, Glencore Xstrata announced Sissingue deposit and the latter plans to invest that they will invest US$35 million Côte d’Ivoire to US$15 million in new equipment in 2015 and US$2 explore the nickel opportunities in the west of the million in each of the next three years for research country42. Existing and future investors will further and exploration with a view to extending the life of benefit from an extensive road-building programme the Agbaou mine34. Newcrest and Randgold are connecting projects scattered throughout the currently mining gold at the Bonikro and Tongon country to the main ports at Abidjan and San Pédro, deposits. The former intends to triple its current which are also being rehabilitated and expanded output of 7 tonnes by 201735 while the latter has (see Section 6.3.5). also announced plans to inject US$49 million into its mine deposit to enhance production36.
33 AfDB (2013). Cote d’Ivoire Combined 2013-2017 Country Strategy Paper and 2013 Portfolio Review. AfDB. Abidjan and Brou J, op.cit. 34 Anonymous. Sissingue project on track – Perseus, Reuters 19 April 2013. and Anonymous. Endeavour Mining raises output forecast for Ivory Coast gold mine, Reuters, 02 Octo- ber 2014. 35 Bavier J. Newcrest eyes tripled gold output at Ivory Coast mine by 2017, Reuters, 5 June 2012. 36. Anonymous. Randgold to boost gold production at Tongon mine in Ivory Coast, Miningtechnology.com, 28 April 2014 37 Coulibaly L. Amara Mining’s Ivory Coast gold mine to start production in 2017, Reuters, 1 October 2014. 38 Brou J (2014). Op.cit 39 Oxford Business Group (2013). The Report: Cote d’Ivoire 2013. Oxford Business Group. London 40 Anonymous. Sama Resources Confirms Discovery of Multiple Mineralized Bodies Within the Samapleu Project. Siliconinvestor.com, 12 August 2010. 41 Tata Steel Investor Presentation December 2010 42 Mieu B. Glencore-Xstrata Nickel will be able to develop the deposits and Sipilou Biankouma. Proactiveinverstors.com, 5 August 2013..
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 28 b. Hydrocarbons However, recent exploration has been promising, with companies such as Tullow, Total and Vanco reporting positive finds and confirming the same Côte d’Ivoire has proven oil reserves estimated at geology present in Ghana extends into Côte d’Ivoire45. 100 million barrels and gas reserves of 1 trillion Based on these finds, the Ivoirian government aims cubic feet43. However, these reserves have not to increase oil production to 200,000 barrels per been fully exploited. Oil producing fields are day within five years46. However, the current lower Lion and Panthere. The US Energy Information oil prices, if sustained, could threaten exploration Administration (EIA) statistics show that oil production and derail government’s targeted objectives. was approximately 37,600 barrels per day in 2013 and that gas production reached 57.2 billion cubic feet per day. Compared to 2013, oil production The national Oil Company of Côte d’Ivoire, Pétrolières decreased by 2.4 percent while gas increased by 7.9 de Côte d’Ivoire (PETROCI), which belongs to percent (see Table 5). Côte d’Ivoire is a net regional the state, was set up to develop the country’s oil energy exporter, though it imports crude oil to be resources. Together with foreign oil companies, it refined in local refineries that are better configured carries out prospection and exploitation of oil and for heavier oil produced elsewhere44. Growth in the natural gas deposits. Other companies undertaking oil sector has been supported by steady increases exploration activities include Foxtrot International in regional electricity demand, but production had LDC, Canadian Natural Resources and Afren. been declining due to a lack of investments.
Table 5: Oil and gas reserves, production and consumption
Source: U.S. Energy Information Administration
43 US EIA Accessed at http://www.eia.gov/countries/country-data.cfm?fips=IV 44 Ibid 45 BMI Research (2015). West Africa Mining Report – Q2 2015. BMI Research. London. 46 Antink FH (2014). Factsheet Country Analysis – Cote d’Ivoire. Netherlands-African Business Council
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 29 Natural gas production is expected to increase The tax exemption applies to transactions or further in the medium, supported by increased purchases directly and exclusively assigned to investment estimated at US$1 billion over the next petroleum. The Code also provides specific rules five years. Furthermore, gas exploration activities concerning calculation of corporate income for are intensifying while the construction of new tax purposes. Non-exempt income is subject to 50 pipelines to Ghana is planned, to link up with the a corporate income tax at the rate of 30 percent . pipeline from Nigeria to Northern Côte d’Ivoire, with a view to a connection to the networks of North 6.1.3 Key Sector Challenges and Risks Africa47. The downstream hydrocarbon sub-sector is also an important component of the economy. Infrastructure deficit, especially freight transport to The country’s estimated petroleum needs are put transport the ore deposits to the ports in Abidjan at a million tonnes a year. Côte d’Ivoire’s Société and San Pedro, are key challenges for the sector. Ivoirienne de Raffinage manages a refinery plant with The country’s infrastructure is limited with several a capacity of 75,000 barrels per day. The country road networks having been not maintained for a is self-sufficient in producing refined petroleum number of years. Rail networks are also quite limited. products and is also a major supplier to the West African region48. The foreign investors’ dual search for investment stability on the one hand and profit on the other 6.1.2 Policy and Regulatory Framework means that their commercial interests will need to be balanced against the strategic interests of the Ivorian government, given the socio-economic The Ministry of Petroleum and Energy is responsible context of the extractive sector in the country. Given for mining and energy policy. The Ministry has the projected rise in FDI and revenues associated passed a new Mining Code, which is designed to with the sector, resource nationalism can be a risk attract foreign investors and increase transparency. faced by potential investors. This can manifest itself The code extends the duration of exploration through tax and royalties hikes, increasing social leases; reduces the size of exploration plots to investment requirements; contract renegotiations; increase the number of investors potentially getting restrictions on foreign ownership; requirements for involved; and limits direct state participation to 15 indigenous shareholdings; and calls for minerals percent of the social capital in any new venture beneficiation. (excluding additional participation via State Owned Enterprises and other enterprises where the state has a stake)49 . The United Nations also recently lifted Mining houses also encounter difficulties in terms of a diamond embargo, with the country adhering to power supply, whereby a huge amount of electricity the Kimberly Process. Prospection and exploitation is lost during transmission. As with other countries of hydrocarbons, including PETROCI’s activities, in Africa, local mining companies are taking a ‘build are governed by the new Petroleum Code. The your own’ approach to infrastructure development Petroleum Code provides an exemption from VAT in and around mining sites. For example, in 2013, and additional tax on imports and purchases to Endeavour Mining announced that it had completed companies involved in exploration or production of construction of a 15 km power line to its Agabou oil/gas, which is also extended to their subcontractors mine, allowing it to start production at the mine providing petroleum-specific services. in early 201451.
47 MI Research (2015). op. cit. 48 BMI Research (2015). op. cit. 49 ECIC meeting with CEPICI and Ministry of Industry and Mines, 9-13 March 2015. Abidjan, Côte d’Ivoire 50 Martin Kitchen and Danielle Beggs (2013). Côte d’Ivoire - summary of petroleum legal and regulatory regime. Lexology 51 Endeavour Mining web news releases. Endeavour Mining Initiates Mining at Agbaou and Completes Power Line Installation, 15 October 2013. Accessed at http://www.endeavourmining.com/s/NewsReleasesArchive.asp?ReportID=607853&_Type=News-Releas- es&_Title=Endeavour-Mining-Initiates-Mining-at-Agbaou-and-Completes-Power-Line-Instal...%20title.
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 30 6.1.4 Upcoming Projects and The Ivorian government plans to earmark a Opportunities significant amount of investment into the sector over the next five years, with the aim of making it a pillar of emergence. In the mining and metals sub- The presence of important oil reserves and many sector some of the ongoing and planned projects different minerals, as well as an investor-friendly are depicted in Table 6. legal framework for foreign capital, have made Côte d’Ivoire a favourable target for mining and oil companies who are rushing to exploit new In the hydrocarbon sub-sector there is a planned sources. There is an enormous potential to begin construction of the Côte d’Ivoire-Ghana gas exploiting mineral and hydrocarbon resources, as pipeline (for approximately US$250,000 and cumulatively these are estimated to have reserves in the construction of a floating terminal for the the tens of millions of metric tonnes and billions of storage and regasification of natural gas at a cost barrels, which could potentially make it one of West of US$230 million52. Africa’s major mining and hydrocarbons producers. Table 6: Côte d’Ivoire mining and metals industry projects
Source: BMI Research
52 India Infrastructure Research (2014). Investment and Market Opportunities in African Infrastructure. India Infrastructure Research. New Delhi.
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 31 For South African investors and exporters 6.2 INFRASTRUCTURE - ELECTRICITY opportunities are presented by upstream activities such as mining exploration and development; 6.2.1 Overview underground and surface contract mining services; engineering services (including geotechnical, civil construction and bulk earthworks, shaft sinking, etc.); As of 2013, the overall electricity access in Côte and the supply and delivery of mining equipment. d’Ivoire was 59 percent, with an urban and rural Access to electricity is also a huge challenge in Côte electrification rate of 80 percent and 37 percent, d’Ivoire’s. Increasing population growth rate and respectively53. This shows that an additional effort is economic growth rate are projected to drive annual required to extend energy access to the 41 percent electricity consumption in the country. of the population that currently lacks it. As per Figure 13 the country had an installed generation capacity of 1,510 megawatts (MW) in 2013, with Given the country’s reserves of gas, the opportunity thermal and hydropower accounting for 60 percent to construct gas-fired power plants can reduce the and 37 percent, respectively. The contribution of countries’ reliance on fossil fuels. The majority of renewable energy, including solar and biomass Côte d’Ivoire’s natural gas production (around 70 was only 3 percent of total generation capacity. percent) is used for domestic electricity generation, In order to sustain economic growth, efforts are and therefore increasing supply will help to further under way in the country to increase electricity support new planned gas fired power plants and generation capacity. help the country meet its goal of expanding output and increasing exports. The sector’s expansion and diversification plans include raising hydropower’s contribution to Côte d’Ivoire has opened up activities downstream of electricity generation to 45 percent and that of the petroleum sub-sector. This presents opportunities renewable energy to 5 percent by 202054. The for South African manufacturers of liquid fuels country has a potential hydropower capacity of products. There are also mineral beneficiation 2,500 MW, of which only a quarter is currently opportunities. Although Côte d’Ivoire produces being exploited. gold, copper, iron ore, and other minerals, these are almost all exported in the rough state without any Figure 13: Trends in electricity installed generation value added. Key opportunities for South African capacity companies could include contract mineral processing services; smelting and refining services; and the 1 600,0 supply of related mineral processing equipment 1 400,0 and consumables (e.g. converting and sampling 1200,0 equipment, reagants and chemicals). 1000,0
MW 800,0
600,0 As the oil and gas activities increase in Côte d’Ivoire due to increasing investment in extractive 400,0 200,0 industries and infrastructure upgrades, the demand for harbour work boats, crew and supply craft will increase. This presents opportunities for South 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 African boatbuilders. ThermalH ydropower Renewables Source: US EIA and BMI Research
53 Smertnik H (2014). Mobile for Smart Energy Solutions - Côte d’Ivoire. GSMA. London30 Latest data on FDI inflows and stock by country and sector is non-exist 54 Oxford Business Group (2013). op. cit.
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 32 Côte d’Ivoire has six hydroelectric plants generating Energy demand is expected to remain high in a total of 604 MW and a number of thermal power Côte d’Ivoire over the medium- to long-term, stations fuelled by natural gas. The country’s and the energy shortage is expected to widen if national grid is mainly concentrated in urban generation capacity is not adequately expanded. and peri-urban areas. The country currently has While the country’s economy is still in the recovery a transmission network of 18,000 kilometre (km) stage, following the recent crisis, the provision of of 225 kilovolts (kV) and 90kV lines, covering the financing to boost affordable power is crucial56. The entire country (see Annexure 8.3 illustrating the Ivorian Electricity Company, Compagnie Ivoirienne electrical distribution network of Côte d’Ivoire). d’Electricité (CIE), holds the exclusive rights over the transmission and distribution of electricity, where it has over a million customers57. The company also The country loses approximately 30 percent of its operates the country’s hydroelectric dams and a total production annually and thus experiences thermal plant. unexpected power cuts due to poorly maintained and outdated distribution and transmission networks. Accordingly the government aims to develop and rehabilitate the electric power grid for a maximum amount of US$820 million55. According to Figure 14 electricity demand in Côte d’Ivoire increased at an average rate of 6.7 percent a year from 2004 to 2013 while net electricity production grew at only 4.5 percent a year over the same period.
Figure 14: Trends in electricity consumption and production
Source: US EIA and BMI Research
55 IMF (2014). Cote d’Ivoire – Sixth Review Under the Extended Credit Facility Agreement and Request for Waiver of Non-observance of Performance Criteria, Augmentation of Access, and Twelve-month Extension of the Current Arrangement – Staff Report; Press Release; and Statement by the Executive Director for Cote d’Ivoire, IMF Country Report No. 14/358. IMF. Washington D.C. 56 ESI-Africa.com. Côte d’Ivoire €50 million power expansion project. http://www.icafrica.org/en/news-events/infrastructure-news/ article/cote-divoire-eur50-million-power-expansion-project-4079/ 57 The Africa Report (2014). op. cit.
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 33 ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 34 The market for generation of electricity is The government aims to mobilize approximately liberalised, with independent power producers US$3 billion in order to increase power to 4,000 MW (IPPs) in competition with the CIE. Three by 202059. The authorities also seek to promote private producers, namely, CIPREL (Compagnie and develop sources of renewable energy. Côte Ivoirienne de Production d’Electricité or Ivorian d’Ivoire is well-endowed with solar energy with the Company for Energy Production), Aggreko solar potential in the country ranging from 2.0 – 4.5 and AZITO-Energy dominate the market for kWh/m2/day, with average daily sunshine durations electric power generation for 60 percent of total of 6 hours, indicating a moderate potential for the production. IPPs sell their production to the CIE. use of the resource. Some photovoltaic systems have also been installed in the country through private initiatives in healthcare facilities and some The CIE faces many challenges including non- households60. technical losses, non-repayments (CIE has a 50 percent collection rate), technical losses; and high power outages58. The utility has also confronted 6.2.2 Policy and Regulatory Framework serious revenue deficits in large part due to the country’s political crisis: between 2002 and 2012, The electricity sector in Côte d’Ivoire is governed by the population received electricity but repayments the Ministry of Petroleum and Energy, ANARE (Autorite to the CIE were erratic due to the difficult access to Nationale de Regulation du secteur electricite), some of these areas for billing and collection agents. SOGEPE (Societe de Gestion du Patrimoine du Secteur Electricite), and SOPIE (Societe d’Operation Recovering from this period requires the utility to be Ivorienne d’Electricite). focused on ensuring that repayment rates and other losses are reduced to a minimum. Côte d’Ivoire is The Electricity Code gives greater independence a member of the West African Power Pool (WAPP), and authority to the ANARE by specifically providing a regional electricity trading initiative. The surplus that the regulatory authority is an independent legal of electricity production is exported thanks to the entity with financial autonomy. The authority is in interconnection of the country’s grid to those of charge of overseeing the compliance with the laws, Togo, Benin, Burkina Faso, Ghana, and Mali. With regulations and obligations under authorizations electricity exports accounting for 17 percent of and conventions in force in the electricity sector; total production, the Ivorian government aims to proposing electricity tariffs to the State as well as become a key electricity centre within the WAPP the tariffs to access the national grid; protecting and capitalise on demand growth across the region. users and consumers of the public services and as well as their rights; arbitrating disputes between In order to boost revenues from power exports, operators or between operators and the State; the Ivorian government was pushing ahead with and advising and assisting state in regulating the a subprogramme that seeks to integrate the power electricity sector. sectors of member states by increasing electricity production and building more transmission networks.
These projects are discussed in section 6.2.4 of the report. The electricity subsector’s medium term prospects have been set forth in the NDP and the Ministry of Petroleum and Energy’s Priority Action Plan.
58 Bloomberg, 2013, http://www.bloomberg.com/news/2013-05-23/ivory-coast-power-utility-plans-exports-as-profit-grows.html 59 Bavier J and Flynn D. War-scarred Ivory Coast reopens for business. Reuters, 09 February 2014 60 Reegle (undated). Energy Profile Côte d’Ivoire. Accessed at http://www.reegle.info/countries/cote-d-ivoire-energy-profile/CI
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 35 SOGEPE is responsible for the management of state Electricity tariffs are set and revised by the Minister property, management of financial flows and the of Petroleum and Energy. As in many countries in consolidated accounts of the sector, while SOPIE Africa, electricity tariffs in Côte d’Ivoire have been is in charge of the monitoring of the use of energy, considered as too low and not cost reflective to study and planning, as well as the management of encourage IPP investment in the sector. However, investment on behalf of the state for renewal and Ivorian authorities have implemented a gradual expansion of transportation networks and rural price increases to bridge the generation cost electrification. differential and renegotiating export prices with its neighbours62. The Electricity Code offers: i) a comprehensive and well-defined framework for 6.2.3 Key Sector Challenges and Risks the production, transport, dispatching, distribution, commercialization, import and export of electricity; The energy sector faces structural difficulties, ii) reinforces the powers and competencies of the including limited generating capacity to meet regulatory authority for the electricity sector; iii) takes growing demand. This reflects the low volume into account new and renewable energies; iv) and of investment in the sector over the past decade. includes provisions to fight against fraud and illegal Furthermore, ageing generating, transmission and activities that cause many technical and commercial distribution infrastructure, the high level of losses losses in the electricity. The Code further liberalizes as well as limited resources to finance renewable the power sector by ending the state monopoly energy and hydro-power seriously affects the supply on transport, distribution, commercialization, and of adequate quantities of reliable, clean, sustainable import and export activities of electricity. and low-cost energy. Current power tariffs in Côte d’Ivoire do not reflect generation costs, due in part All those activities may now be operated by one or to the legacy of cheap, subsidised power. Although more private operators pursuant to a convention tariffs have been gradually increased, they have agreement to conclude with the State. The Electricity not adjusted quickly to reflect costs. Finding a Code provides for different legal regimes depending regulatory mechanism to adjust prices and keep on the activities: a free system, a prior declaration this deficit in check is thus an urgent challenge system or a prior authorization system for self- confronting the sector. production of electricity depending on the installed power; a regime of convention for production other 6.2.4 Upcoming Projects and than self-production, for transport, dispatching, Opportunities import, export, distribution and commercialization of electricity; and an approval regime for related activities of the electricity sector. The power sector is seeing significant international investment in line with the NDP and the government’s prioritising of investment into the In order to reduce significant technical and sector. In its strategic plan 2013-2030 for the commercial losses for the state, the Electricity development of the electricity sector in Côte Code also includes a range of new criminal sanctions d’Ivoire, the Government identified 66 projects to fight against frauds such as illegal connection to that will require massive investment from the the grid or acts of damages to the electricity network private sector, including through public private or equipment. The prosecution of any violation to partnerships with IPPs, to expand power capacity the Electricity Code is also now well- organized61. production and to modernize the transport and distribution of electricity throughout the country. Ongoing and planned project developments are outlined in Table 7.
61 Government of Côte d’Ivoire Loi No 2014-132 du Mars 2014 Portant Code de’Electricite 62 Van Kempen J. (2014). New developments in the electricity sector of Côte d’Ivoire. Accessed at http://www.lexology.com/library/ detail.aspx?g=be3be5e4-c4c8-44ec-b3db-4bc1a490be6d
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 36 Table 7: Power projects in Côte d’Ivoire
Source: US EIA and BMI Research
Côte d’Ivoire presents opportunities for South Further investment opportunities exist in rural and African exporters of electrical equipment, including urban electrification, the construction of renewable transformers, prepaid meters, high- and medium- energy plants, and transmission and distribution voltage switch gear, circuit breakers, transmission networks and substations. technologies, solar panels and wind energy turbines.
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 37 6.3 INFRASTRUCTURE – TRANSPORT Côte d’Ivoire neighbouring landlocked countries (Burkina Faso, Mali, Niger and Guinea) continue to rely heavily on its transportation facilities for 6.3.1 Overview their imports and exports and passenger traffic in and out of Côte d’Ivoire. Partly due to this and a. Air the result of the long socio-political crisis which resulted in the destruction of infrastructure and the Côte d’Ivoire has an air transport network comprising trimming of budgets intended for its maintenance, of three international airports (located in Abidjan, road transport costs have risen and service quality Yamoussoukro, and Bouake) and a total of 23 has declined significantly in the country. airports for the domestic traffic. It is currently served by around 20 international airlines, including c. Rail Turkish Airlines, South African Airways, Royal Air Maroc, Emirates, Brussels Airline and Air France. The country has a 1,249 km of railway line that The authorities have also relaunched Air Côte connects Abidjan port to the north of the country d’Ivoire in their quest to build a strong domestic network. and further connects with Burkina Faso. The line plays a major economic role for both domestic and regional trade, but has become obsolete. Abidjan’s Felix Houphouet-Boigny International Société Internationale de Transport Africain par Rail Airport is the main port of entry and exit for both (SITARAIL) has been granted a 15-year concession passenger and freight, accounting for 90 per cent to operate the line. The joint venture between of total airport passenger traffic. AERIA, a privately Comazar and Bolloré is the designated technical company, manages Abidjan’s Felix Houphouet- railway operator. Boigny International Airport. Airport passenger traffic has experienced a huge decline of 56.3 d. Maritime percent in 201263. This is attributed in part to the insolvency of regional carriers and compounded by the civil war in 2011. The majority of Côte d’Ivoire’s international trade is conveyed via two ports, namely the Port of Abidjan b. Road in South-east and San Pédro in South-west. The Port of Abidjan is the main transit and transshipment Côte d’Ivoire has a road network of 87,000 km of port in West and Central Africa. The port handles roads, of which approximately 6 500 km are tarred. the majority of Côte d’Ivoire’s cocoa exports, and An assessment by the authorities shows that 80 60 percent of international trade of landlocked percent of paved roads are 15-25 years old and nearly countries such as Mali, Burkina Faso and Niger66. The half of these roads are 20 years old. Approximately, port’s container terminal has a capacity of 800,000 4,500 km of the country’s paved roads are in a poor twenty-foot equivalent units (TEUs), welcoming state64. Although the country has a lower road ships carrying up to 4,000 containers. density, the road network includes primary and secondary roads that sufficiently connect cities, secondary towns and international borders. The government has an ambitious plan to build 1,000 km of tarmacked road each year as well as resurface 500 km of existing dirt roads at a total annual cost of nearly US$250 million65.
63 India Infrastructure Research (2014). op.cit. 64 ECIC meeting with Ministry of Economic Infrastructure, 9-13 March 2015, Abidjan, Côte d’Ivoire, and Oxford Business Group, op. ci.t 65 Antik FH (undated). Factsheet: Country Analysis Côte d’Ivoire. Netherlands-African Business Council. Amsterdam. 66 Ibid.
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 38 After a slump in port traffic in 2011 due to the political conflict, traffic is steadily increasing in both ports. As per figure 15, traffic at the Port of Abidjan stood at 21.7 million tonnes in 2012, compared to 16.6 million tonnes in 2011. The Port of San-Pédro experienced a traffic volume of 3.2 million tonnes in 2012, a year-on-year increase of approximately 78.5 percent from 2011.
Figure 15: Growth in port traffic
Source: India Infrastructure Research (2014) The private sector has been an important participant in port activities in Abidjan, primarily through concessions for the container and ore terminals. For example, Bolloré manages the Port of Abidjan under a 15 year concession, while the Port of San-Pédro is operated by Mediterranean Shipping Company. The Ivorian government aims to boost traffic at the country’s two ports from 25 million tonnes in 2012 to 100 million in 202067.
6.3.2 Policy and Regulatory Framework Ivorian legislation on market access for air transport is based in principle on the Yamoussoukro Decision68 and the WAEMU community provisions. Pursuant The Directorate-General of Land Transport is the to its statutes, the National Civil Aviation Authority, entity responsible for policy in the land transport Autorité Nationale de l’Aviation Civile (ANAC) sector. Ordinance No. 2000-67 of 9 February 2000 is an autonomous body under the Ministry of is the framework law for the sector. Transport. The tasks of ANAC include certifying airlines, awarding traffic rights, certifying airports, In the air transport sub-sector, the Airport, ensuring air safety and regulating ground services. Aeronautics and Meteorology Operating and The road transport sub-sector is governed by two Development Company (Societe d’Exploitation et institutions, namely Agence de Gestion des Routes de Developpement Aeroportuaire, Aeronautique and Fonds d’Entretien Routier (Road Maintenance et Meteorologique or SODEXAM) manages the Fund). The former is the regulator, whilst the latter airports and represents the state in the Abidjan provides financing for road maintenance, markets airport concession to a private partner. The 15- road services and grants contracts for repairs. year concession agreement binding the State of Côte d’Ivoire to the Abidjan International Airport Company, namely AERIA provided for payment of a fee proportionate to its turnover. The concession was renewed in 2011.
67 The Africa Report (2014). Investing in Côte d’Ivoire 2014. The Africa Report – Groupe Jeune Afrique. Paris. 68 Yamassoukro Declaration concerning the liberalization of air transport and market access in Africa, signed on 14 November 1999 is aimed at establishing a single African air transport market by avoiding market restrictions imposed by bilateral air service agreements.
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 39 ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 40 Foreign companies are not authorized to transport According to a World Bank report, Côte d’Ivoire’s is goods between two destinations in Côte d’Ivoire characterized by lax enforcement of the charge load (cabotage). Under the agreement regulating road per axle, which accelerates deterioration of the road transport among the Economic Community of West network. The report further points out that road African States (ECOWAS), a vehicle registered in one freight tariffs in the country are considered high as Member State can only load goods in one State for compared to other developing countries. This is delivery in another State. due to limited competition in the market and the load reservation system practiced in the country71. All international routes are divided among the transporters of the two countries concerned under In the rail segment of the market, the volume of bilateral agreements. For example, the Cooperation freight traffic is considered low and competition Agreement on Maritime Transport and Transit from the road sector makes it impossible for rail between Burkina Faso and the Republic of Côte networks to earn sufficient revenue to finance d’Ivoire, signed on 14 October 1989, provides for track rehabilitation. The maritime sub-sector is still freight allocation on the basis of 2/3 for Burkina faced with challenges, including the unsuitability Faso and 1/3 for Côte d’Ivoire69. of the port infrastructure (limitation of the size of ships able to pass through Vridi Canal to Abidjan Port), congestion of port areas due to lack of space Rail transport is still a state monopoly. The state in central Abidjan, insecurity and lack of maritime owns the track, which is used by SITARAIL under and port security. a concession agreement with the states of Côte d’Ivoire and Burkina Faso. The Ivorian Railway Assets Management Company is responsible for A shortage of warehouse space for empty containers monitoring the concession. Maritime transport tends to lead to bottlenecks in the ports area. The policy is the responsibility of the Directorate-General Port of Abidjan is currently unable to accommodate of Maritime and Port Affairs. container ships longer than 150 metres or with a draught greater than 11.5 metres, limiting it to West African Maximum vessels. The concessionaires at the country’s ports are responsible for towing, pilot and berthing activities at both ports. There are no restrictions on foreign The narrowness of the canal also increases waiting presence in the legislation governing these sectors. times for docking at the container terminal72. Côte Tariffs are set independently by the two ports in d’Ivoire’s port sector will have to deal with continued line with the nature of the products concerned. pirate activity in the Gulf of Guinea. This could deter investors and shippers.
6.3.3 Key Sector Challenges and Risks
In the air transport sub-sector, Abidjan airport is considered one of the most expensive in the region. Due to monopolistic behaviour, handling costs are high, thus posing an obstacle to its ambitions to become a regional hub70. Furthermore, the air transport sub-sector continues to face security and safety issues as the country has not yet passed the International Aviation Safety Assessment Audit.
69 WTO (2012). Trade Policy Review - Côte d’Ivoire. WTO. Geneva 70 Oxford Business Group (2013). op.cit. 71 Foster V. and Pushak N. (2011). Côte d’Ivoire’s Infrastructure - A Continental Perspective. Policy Research Working Paper No.5594. World Bank. Washington D.C. 72 Oxford Business Group (2013). op.cit.
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 41 Table 8: Transport sector projects in Côte d’Ivoire
Source: African Development Bank (AfDB), Organisation for Economic Co-operation and Development (OECD) and United Nations Development Programme (UNDP)
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 42 6.3.4 Upcoming Projects and 6.4 INFRASTRUCTURE – WATER AND SANITATION Opportunities 6.4.1 Overview The Ivorian government has placed transport infrastructure at the centre of its plans to revitalize In Côte d’Ivoire 80 percent of the population the national economy. The improvement of has access to drinking water, but wide gaps transport network is crucial to increasing growth exist between urban (92 percent) and rural (68 in its export-led agriculture sector and the mining percent) communities78. In Abidjan alone, there industry, as well as capitalizing on the country’s is a water deficit of 200,000 m3 per day79. There role as a commercial transport and logistics hub for are very few public standpipes - most households the West African region. The NDP has dedicated without an in-plot connection get water from approximately US$8 billion (representing 40 percent private water vendors or wells. Water quality is of planned investments in the NDP) to transport nevertheless uniformly good. infrastructures and services73.
The International Federation of Red Cross South African exporters have an opportunity to (IFRC) states that fewer than 43 percent of Côte invest in the rehabilitation and the replacement of d’Ivoire’s households nationwide have adequate rail tracks, development and construction of airports, sanitation80. A large share of the population, roads and bridges. Expansions and upgrading to however, still practices open defecation. The NDP port infrastructure in the country may indicate aims to give 60 percent of the population access further demand for port assistance craft, including to basic sanitation in the short to medium term tugs, pilot and patrol boats. South Africa has a and an estimated US$1 billion in investments has comparative advantage in exporting such crafts. been earmarked for this.
South African exporters have further opportunities 6.4.2 Policy and Regulatory Framework to invest the construction of ports quay walls, graving and floating docks, slipways and port The Ministry of Economic Infrastructure provides storage facilities. In the air transport sub-sector oversight and policy guidance on the water and South Africa should also seize the opportunities sanitation sector. Société de distribution d’eau presented by the bilateral air services agreement de la Côte d’Ivoire (SODECI) is a semi-public signed with Côte d’Ivoire. company tasked with water and sanitation services in urban areas, excluding rural areas. Some of the key projects in the transport sector are SODECI has been operating under a lease illustrated in Table 8. contract with the government of Côte d’Ivoire.
73 World Bank (2013). op. cit. 74 IHS (2015). Country Reports – Cote d’Ivoire. IHS. Londo 78 The Africa Report (2014). op. cit. 79 ECIC meeting with the Ministry of Economic Infrastructure, 9-13 March 2015, Abidjan, Côte d’Ivoire 80 Issa Z (2015). Increased Access to Safe Water Bridges Gaps and Reduces Vulnerabilities . IFRC. Geneva
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 43 The country has a Water Development Fund - Fonds de According to the Ministry of Economic Infrastructure Développement de l’Eau (FDE) managed by SODECI. opportunities exist in the management of solid The fund aims to finance network extension and waste; switch management or waste water disposal; subsidize household connections under a social run-off management and management of human connection programme. The FDE is funded through excreta. a tariff surcharge paid by connected customers. As the water and sanitation needs of Côte d’Ivoire 6.4.3 Key Sector Challenges and Risks grow, there will be a greater need for the supply of water and sanitation infrastructure equipment such as tanks, pipes and fittings, valves, pumps A growing population and rapid urbanization are and related motors, ultraviolet and reverse osmosis putting serious strains on water supply, sanitation equipment, flow meters, etc. and solid waste management. The funding gap and the government’s ability to adequately absorb and effectively service the sector, without donor There are also turnkey opportunities in the support remains a cause of concern. design and construction of reservoirs, water treatment plants, booster pumps stations and chemical dosing buildings. 6.4.4 Upcoming Projects and Opportunities
The sector has a number of donors that are active in the sector; both the AfDB and the World Bank have funded projects under the Rural Water Supply and Sanitation, under the umbrella of Projet d’alimentation en eau potable et assainissement rural drinking water and rural sanitation project.
Approximately 15 projects worth US$320.2 million are under way or being studied. This include, among others:
o Supply of groundwater from Bonoua to Abidjan – a project financed by China Exim Bank. o Installation of 300 gravity systems and 350 equipped wells in the country each year81. o Reinforcement of the system of sanitation and sewerage in the District of Abidjan at a cost of US$159 million o Construction of a new water plant in Yopougon.
81 AfDB, OECD (2007). African Economic Outlook – Côte d’Ivoire. AfDB and OECD. Tunis and Paris.
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 44 6.5 INFRASTRUCTURE – INFORMATION AND WACS is a four-fibre pair cable system directly COMMUNICATION TECHNOLOGIES linking the southern and western coast of Africa with Europe. It has 15 established terminal stations along its route, which include South Africa, Namibia, 6.5.1 Overview Angola, Democratic Republic of Congo, Republic of Congo, Cameroon, Nigeria, Togo, Ghana, Ivory As in many African countries, the ICT sector is Coast, Cape Verde, Canary Island, Portugal, and the a powerhouse of the economy in Côte d’Ivoire, point of presence in London. with a turnover of approximately US$1.7 billion buoyed by the expansion of the internet and Alongside the MTN Group, the WACS Consortium 82 mobile communications . The latter is a constitutes 11 operators85. One of the country’s platform for a growing number of new services strong points is its mobile sub-sector. As of 2013, such as e-banking, e-health, e-education the country had seven mobile phone operators in and e-government programmes via mobile the market, with a total of 19.4 million subscribers telephony. (an average growth rate of 9.6 percent since 2009), representing a penetration rate of 95.5 percent The government aims to establish Côte d’Ivoire (see Table 9). as a digital hub. To this end, the authorities have implemented an ambitious development plan in In 2014, MTN and Orange held respectively 37 the ICT sector, including flexible regulations, the percent of the market, Moov/Etisalat had 19 percent, construction of a 6,500 km band-width network Koz, 4 percent, Green Networks 2 percent and Aircom to ensure national territorial network coverage and YooMe, less than 1 percent market share86. and the launch of an Information Technology and Various developments in the mobile industry have Biotechnology Village – a free zone dedicated to been a catalyst for other services in the economy. 83 technological businesses . For example, banks have started implementing mobile banking services in addition to automated The country is connected to the world through teller services. two major optical fibers, namely the African Coast to Europe (ACE) and the West Africa Cable System Orange and MTN have partnered with banks to (WACS) – Annexure 8.6 provides an illustration of give customers the ability to make small payments, African undersea cables bypassing Côte d’Ivoire. money transfers, and utility bill payments over ACE is a cable system along the west coast of Africa mobile phones, while Moov has partnered with the managed by a consortium of 17 operators headed post office to transfer money through the postal by France’s Orange. service network87.
The first phase of the 17,000 km-long fiber optic cable was put in service on December 15, 2012. The cable will eventually connect 23 countries, either directly for coastal countries or through land links for landlocked countries such as Mali and Niger84.
82 BMI Research Data 83 ECIC meeting with the CEPICI, 9-13 March 2015, Abidjan, Côte d’Ivoire 84 Accessed at http://www.fiberopticmania.com/news/details/953/guinea-opens-ace-landing-point-in-conakry 85 MTN Press Release, 14 May 2012. Accessed at http://pressoffice.mg.co.za/mtn/PressRelease.php?StoryID=229798 86 Smertnik H (2014). op. cit. 87 BMI Research (2015). op. cit.
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 45 ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 46 Table 9: ICT coverage in Cote d’Ivoire
Source: International Telecommunications Union and BMI Research
There have also been positive developments in the The two companies that provide fixed line service internet and broadband industry since the arrival in the country are Arobase, owned by MTN, and of the international submarine fibre optic cables, Côte d’Ivoire Telecom. ACE and WACS. This brought down the cost of international bandwidth and made internet access 6.5.2 Policy and Regulatory Framework more affordable to a wider part of the population. The internet sector has also benefited from the roll- out of third generation mobile broadband services, The Ministry of Posts, New Information Technologies with the number of internet users in the country and Communication has responsibility for policy in rising rapidly between 2009 and 2013. this sector. The ICT Regulatory Body of Côte d’Ivoire - Autorité de Régulation des Télécommunications de Côte d’Ivoire (ARTCI) was established by Decree Table 9 shows that the number of broadband and No. 2012-293 dated 21 March 2012 after the internet users has grown exponentially over the past merger of the Telecommunications Council of Côte five years, respectively growing at 110.6 percent d’Ivoire - Conseil des télécommunications de Côte and 64.5 percent. Data from the International d’Ivoire and the Telecommunications Agency of Telecommunications Union also shows that internet Côte d’Ivoire (ATCI). penetration grew from 0.2 percent in 2009 to 6.0 percent in 2013 – an average growth of 106.0 percent. The use of voice over internet protocol ARTCI is at the center of the government’s plan to (VoIP) for international calls has also increased grow the digital economy and extend state-of-the tremendously. There are four companies providing art services to millions of Ivoirians. high-speed internet access in Côte d’Ivoire, namely Afnet, Aviso, VIPNet and Alink Telecom. The aim of ARTCI is to implement the regulations on telecommunications; authorize the tariff ratings The fixed line telephony sub-sector has experienced for services supplied under the monopoly system; a decline in the number of subscribers from 282.1 issue authorizations to operate telecommunications thousand in 2009 to 272.1 thousand in 2013 – an services; issue approvals for terminal equipment; average decline of approximately 1.0 percent. The and manage and monitor the radio frequency decline highlights the increasing rate of fixed to spectrum. mobile substitution, which is expected to accelerate in the coming years on the back of the deployment of next generation wireless broadband networks.
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 47 The Agency of the Universal Service of 6.5.4 Upcoming Projects and Telecommunications - Agence Nationale du Opportunities Service Universel des TélécommunicationsC (ANSUT) is a public agency dedicated to ensuring universal provision of telecommunications While mobile technology has taken off, the internet services for individuals and businesses. The and internet broadband in Côte d’Ivoire requires agency runs a number of initiatives and projects significant investment to reach the same level that aim to greatly improve access to ICT of widespread adoption (as reflected by the low services, with the aim of improving the well- penetration rates), and there also exists a gap in being of citizens and the national investment the services available to residents in rural areas. environment. ANSUT further aims to expand its current fiber-optic network by targeting Some of the planned projects in the sector include, foreign investors, in order to create an influx of inter alia: e-solutions for banking, health, and education services88. o E-government services - Interconnection of Public Administration. A new telecommunications code was adopted on o Installation of optical fiber network a March 21, 2012 to adapt the regulatory environment cross the country. to technological changes. The law opened all telecommunications services to competition with o Transition to Digital Terrestrial Television the exception of supply of telephony services at an estimated US$121 million. between fixed points, telex and the establishment o Creation of 5,000 public cyber centers of public telecommunications networks. o Use of ICT in the areas of Health and Education. 6.5.3 Key Sector Challenges and Risks o Rural Development and Digital Inclusion Project. The significant growth potential for Côte d’Ivoire’s ICT sector, especially the under-served data market, The Ivoirian telecommunication market for the is a major attraction for telecoms investors. However, full range of telecommunication equipment and new investors may be deterred by the government’s components is growing, including copper and fiber 2014 decision to raise telecoms business tax from optic cables, central office switches, cellular stations, 25 percent of profits to 30 percent. Further to the data communications satellites, and microwave increased taxation, the government requires that communication equipment. Best prospect for South companies transferring profits out of the country African suppliers in the ICT sector include prepaid subscribe to treasury bills to an equivalent value of calling cards, VoIP equipment and tools, wireless 20 percent of the funds leaving the country89. This networks, wi-fi equipment, wi-max equipment, move has already negatively affected some of the CDMA equipment, DSL equipment, GSM solutions operators, with Moov/Etisalat partly attributing the and applications, call centers, fiber-optic cables, company’s poor financial performance to the tax and billing solutions. increase90. Higher taxes on the telecoms industry are likely to have long term negative effects on the markets’ ability to continue investing in new technologies and expanding networks to rural areas.
88 Global Business Worldwide (undated). Ivory Coast – The Comeback. Accessed at http://www.globalbusiness.uk.com/ pdfs/2014/2014-09-ivorycoast.pdf 89 Bavier J. Ivory Coast to increase telecoms taxes, regulations. Reuters, 04 February 2014. 90 BMI Research (2015). West & Central Africa Telecommunications Report Q1 2015. BMI Research. London
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 48 6.6 INFRASTRUCTURE – REAL ESTATE In the coming years, the building and construction market is expected to continue to grow, given the government’s priority of addressing the housing 6.6.1 Overview shortage nationwide. It is projected that the building boom will have a snowball effect on high-end The real estate sector in Côte d’Ivoire is characterized housing, malls and office buildings. by a lack of supply across all industries, including in residential, commercial and retail industries. Rapid 6.6.2 Policy and Regulatory Framework urbanization and rapid population growth have created a strong demand for real estate. The main government body responsible for policy and oversight in the sector is the Ministry of The estimated shortage of housing units in Côte Construction, Urban Development and Housing. d’Ivoire is placed at 20,000 a year, half of which The essential role of the Ministry is to regulate, is in Abidjan alone. The demand for luxury promote and encourage the private sector to invest accommodation has been on the increase due in real estate with important incentives including, to the increased purchasing power by white- identification of reserves, land registration, and tax collar professionals and returning foreign-trained exemption of undeveloped land. Ivorians. The demand for low-income and social housing is bolstered by spread of informal settlements in urban areas such Abidjan, San There is also a Cabinet-level Ministry of Housing Pédro and Yamassoukro91. Promotion, which focuses on encouraging home ownership by improving accessibility. The Ministry assists with access to mortgages for low-income Despite growing demand, the market for retail and earners, signing agreements with real estate commercial properties is still underdeveloped in developers and encouraging procurement of local Côte d’Ivoire – with the exception of Abidjan. The content for construction. The Ministry established Plateau central business district (CBD) in Abidjan the National Housing Collateral Fund, and the Social is the hive of activity for the retail and commercial Housing Fund schemes designed to improve buyer segment of the market. In other areas, offices solvency and to allow prospective homeowners are converted homes used as offices. Due to the pro-longed duration to repay loans beyond the constrained space for retail and commercial activities, standard period. These schemes also allow low- prices and rental fees are continually driven up. income earners to secure cheap loans93.
The demand for real estate property in Côte d’Ivoire has attracted players such as Addoha, a Moroccan company, which has committed to 2,600 units; the US African Business Development Group, which will invest US$52 million in the construction of 3,000 subsidised units; and China’s Henan Guoji Construction Group, which plans to invest US$1 billion and build 10,000 units in the country92.
91 Oxford Business Group (2013). op. cit. 92 The Africa Report (2014). Investing in Côte d’Ivoire 2014. The Africa Report – Groupe Jeune Afrique. Paris 93 Oxford Business Group (2013). op. cit.
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 49 6.6.3 Key Sector Challenges and Risks Some of the key planned real estate projects include, inter alia: A lack of funding remains a major challenge in real estate sector in Côte d’Ivoire. Local banks generally • Construction of 20 200 housing unit lack the resources needed to finance large-scale for military and gendarmes in Abidjan, projects. Consequently, most developers tend to Bouaké, Daloa, Korhogo and look to foreign banks to compensate for the lack Yamoussoukro. of funding in the country. • Construction of a hospital for the armies • Construction of 60,000 housing units The concept of mortgages exists, but mortgage for police, gendarmerie and other civil lending is not well developed. According to the servants. Oxford Business Group, less than 1 percent of real • Construction of a wholesale market estate projects in the country receive funding from in Abidjan and in seven regional the banking sector94. Furthermore, the commercial capitals at a cost of US$253 million. mortgage rates offered by local banks are considered very high by prospective homeowners. • Building project of 4 battalions of infantry and 11 squadron of gendarmerie.
Property and title registration systems exist in Côte d‘Ivoire, but in practice are only used in urban areas. However, in many instances vast amounts of land for development is held by customary landowners, who will seek compensation. Dissolving customary rights is considered a long and complex legal process that can likely stall a potential project95.
6.6.4 Upcoming Projects and Opportunities
The real estate sector offers excellent opportunities to export South African manufactured building materials, heavy equipment, specialized project management tools and related services. Construction equipment (new and remanufactured) and related spare parts could be attractive in the Ivoirian marketplace. Significant opportunities exist in providing equipment, furniture, and housewares and office equipment as residential and commercial developments are finished.
94 Ibid 95 ECIC meeting with HC Capital Properties, 9-13 March 2015. Abidjan, Côte d’Ivoire.
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 50 ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 51 6.7 TOURISM The hotel capacity (over 70 percent) of Côte d’Ivoire’s is concentrated in and around Abidjan. On average 60 percent of the rooms belong to the branded or 6.7.1 Overview large independent hotels. In Abidjan, the Plateau concentrates 75 percent of the branded supply, The country’s tourism potential is based on its rich and performances achieved by Abidjan’s hotels – cultural heritage, its beaches and seaside activities occupancy rate of 65 percent in 2013, reflect the and its natural parks. Yet despite its undeniable dynamism and resilience of the market. Provincial tourism potential, its growth has been inhibited by hotel spots include Yamoussoukro, the political years of political instability and lack of supporting capital and the second hotel market. Minor leisure policy reforms and initiatives. While there is much oriented supply has been developed along the that needs to be done for Côte d’Ivoire to fulfill coast around Grand Bassam and Sassandra. The its potential in tourism, if adequately addressed, number of rooms is expected to double, if not tourism can undoubtedly become a significant triple by 202097. The additional supply is expected contributor to the country’s economic revival. to impact hotel performances, especially market occupancy rates. Due to its geographical advantage and infrastructure, Côte d’Ivoire has played a major role and will Figure 16 shows the number of tourist arrivals in continue to do so in West Africa through increasing Côte d’Ivoire for the past decade. Meetings, Incentives, Conference and Exhibition tourism activity. The country has hosted significant international events, for example the International Forum of Investments in Côte d’Ivoire in 2014. The country is focusing on maximizing the potential of its tourism offerings as it looks to achieve its target of 1 million in 202096.
Figure 16: Tourist arrivals in Cote d’Ivoire
Source: AERIA
96 Global Business World (undated). op. cit. 97 Specht C (2014). Hotel Yearbook 2015 - Côte d’Ivoire Country Report. Howarth HTL. London.
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 52 After years of strong growth, international tourist 6.7.2 Policy and Regulatory Framework arrivals plummeted 33 percent in 2011, from 400,000 to 270,000 – due to the political instability The Ministry of Tourism is responsible for overall encountered during that year. Since then, however, oversight and tourism policy. The Ministry has the sector has displayed impressive resilience. mandated Côte d’Ivoire Tourism to promote the Arrivals have grown by an annual average of 50 tourism sector in the country. The latter provides percent in 2012 and by 25 percent in 2013, despite information concerning all areas of culture the economic slowdown in Côte d’Ivoire’s principal and tourism: hotels, activities, trips, practical source markets. information, etc.
This is testament to Côte d’Ivoire’s enduring appeal, The government has also created an entity called as well the sector’s ability to adapt to challenging Company for the Development of Tourism in the conditions. By 2024, international tourist arrivals are Lakes Region - Société de développement touristique forecast to total 574,000, generating expenditure de la région des lacs (Sodertour Lacs). Sodertour of US$199 billion, an increase of 4.7 percent per Lacs is a state-owned company created to advance annum98. This will be buoyed by the expected and develop tourism in the Ivorian lakes region. increase in regional and international business exchanges. The company does so by providing regulatory assistance and technical advice to public entities In terms of source market, the ECOWAS market related to tourism. It further supports the creation and accounted for 38 percent of total international visits implementation of policies, plans, programmes, and in 2013. France was the next source market for projects for tourism development, and operation of 22 percent of total visits. Other important source resorts and places of interest to tourists. Sodertour’s markets include rest of Africa and rest of Europe portfolio of tourists sites and infrastructure include, which, respectively accounted for 22 percent and among others, Hôtel Président Yamoussoukro, 7 percent of the total international visitors in 2013. Hôtel des Parlementaires Hotel Yamoussoukro, Hôtel Carrefour Séguéla, Président Golf Club This figure has diverged little in the past five years, Yamoussoukro, Banks of Lake Kossou, and Wildlife pointing to a lack of market diversification. According Reserve of Abokouamékro100. to the World Travel and Tourism Council, 40.8 percent of visitors come to Côte d’Ivoire motivated Côte d’Ivoire has adopted a new tourism code. by leisure, while 59.2 percent come mainly for The objective of the code is to make tourism an business reasons99. industry for economic and social development. To achieve this goal, the government’s commitments Côte d’Ivoire is currently connected with nine global have focused on: destinations through flights on Air Côte d’Ivoire and (i) the identification and development of new foreign carriers such as Air France, Corsair, Egyptair, tourism sites; (ii) the training of stakeholders for Emirates, Ethiopian Airlines, Kenya Airways, Middle better control of marketing to improve the quality East Airlines, Royal Air Maroc, and South African of services; (iii) the creation and improvement of Airways. It is reasonably well linked regionally, with infrastructure (road transit centers, airports) providing regular flights to South Africa, Kenya, Ethiopia and access to tourist sites; (iv) securing tourist sites; and other ECOWAS members. (v) the intensification of investment promotion in the tourism and hospitality sectors101.
98 World Travel and Tourism Council (2014). Travel and Tourism: Economic Impact 2014 Côte d’Ivoire. World Travel and Tourism Coun- cil. London 99 Ibid 100 Accessed at http://www.sodertour.ci/Presentation.php 101 Government of Côte d’Ivoire Law No. 2014-139 of 24 March 2014 on the Code of Tourism.
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 53 6.7.3 Key Sector Challenges and Risks • Construction of a hotel (55 rooms and 10 suites) with a business centre and The key risk and challenges associated with leisure and safari facilities in Tonkpi tourism investment in Côte d’Ivoire include region, Domoraud Quarter, Man. concerns about the political stability and safety of • Construction of a 4 star hotel (70 rooms), the host country, and unclear or incomplete laws Billionaires’ Bay, Lake Abion, Abidjan. on property ownership. The tourism industry is • Construction of a 4 star hotel (50 rooms), very sensitive to security issues, especially leisure tourism. Adzope. • Construction of a hotel (65 rooms),
The country further lacks professionals with skills Sassandra. ranging from construction to professional training and hotel management in order to preserve, maintain Several opportunities are available for South African and develop these assets as well as rationally investors, including the design, construction and integrate them into an ambitious tourism policy. management of luxury lodges and retreats. Apart from these, marine tourism opportunities exist. Côte d’Ivoire and in particular Abidjan has a substantial 6.7.4 Upcoming Projects and number of bodies of water that are still unexploited. Opportunities
A luxury boat cruise or tour operatorship could be Côte d’Ivoire possesses an impressive set of natural a great idea. There is also room for South African and cultural assets. Yet in some cases, they have investors to partner with the Ivorian government not been sufficiently supported to transform into on national park concessions. In this regard South high-quality tourism products. The country has been Africa should seize the opportunity presented by the making strong progress in a number of product bilateral cooperation agreement on the Technical development areas and tourism infrastructure Management of the Abokouamekro Game Park102 . investments, but many of these efforts experienced setbacks with the 2011 political crisis.
Under its current tourism plan, the Ministry of Tourism has identified priority projects for tourism development to include the following:
• Construction of Straw Room Hotel • Rehabilitation of 5 Sietho Hotels and construction of Sietho 25 3-star hotels in the regional capital cities • Rehabilitation and management of Ivory Golf Club Hotel in Abidjan • Rehabilitation and operation of the hotel President of Yamoussoukro, the Golf Course of Yamoussoukro and the Animal Park of Abokouamekro
102 ECIC meeting with South African Department of International Relations and Cooperation officials, 30 January 2015. Pretoria.
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 54 7. CONCLUDING REMARKS
Côte d’Ivoire is poised for an economic revival. Infrastructure remains a key avenue for future growth, There are signs that the country is to recover some as the government in Côte d’Ivoire has aligned ground it has lost, with strong growth posted in structures and plans to encourage investment recent years and a new strategy in place to sustain in the country. There are immense opportunities the expansion. This has contributed to a marked shift to export capital equipment and investment in in the global investors’ perception of the country. proposed projects on the ground.
FDI and trade have been on the rise over the past Positive developments in the internet and few years, indicating that the country’s investment broadband sector have begun following the climate has improved. Resumption of relations arrival of the international submarine fibre with multilateral organisations means that the optic cables and wireless broadband access country could sustain critical public investment networks are also being rolled out. These ICT programmes and further improve medium term developments provide further opportunities economic prospects. for greenfield and brownfield investments. Côte d’Ivoire is posed for a booming real estate property market, buoyed by a growing middle The country remains a trading platform because of class and strong economic performance. its geographic position, providing an immediate access to the ECOWAS market of approximately 300 million potential consumers. There is a huge shortage of residential, commercial and retail real estate. In tourism, the country’s ecosystem and kilometres of beaches and lakes Logistically, it is situated on the Abidjan/Lagos offers investment opportunities in resort hotels, road corridor, around which over 60 percent of the ecotourism hotels, business and tourist hotels and region’s economy is concentrated. The transport high-end hotels. Prospects to develop boating system is one of the best in West Africa despite tourism and take advantage of the nature parks the degradation caused by the crises and could exist as well. enable the country to once again play its role of intra-regional trade hub.
The country offers export and investment opportunities in the extractive industries, infrastructure, tourism, ICT, water and sanitation, and real estate sectors. Extensive recoverable reserves offer untapped potential in the hydrocarbons and mining industries, both onshore and offshore buttressed by the government improving the business environment and transparency.
Supplementary to that, the port infrastructure is the best in the West African region. In infrastructure, the government is keen to partner with private companies to develop and improve the country’s infrastructure including roads, railways, power generation facilities, and water and sanitation facilities.
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 55 Development finance institutions, such as the Industrial Development Corporation and the Development Bank of Southern Africa, and local commercial banks provide South African exporters and investors with adequate financial facilities to venture successfully into Côte d’Ivoire. These institutions fund commercially viable projects through in-house instruments, such as equity and quasi-equity financing, the provision of commercial debt and export finance.
The Export Credit Insurance Corporation of South Africa further underwrites bank loans against commercial and political risks that might be experienced by South African exporters and investors in Côte d’Ivoire. At the government level, the Department of Trade and Industry and the Department of International Relations and Cooperation have foreign representatives stationed in Côte d’Ivoire to promote South African commercial interests and assist companies. The Department of Trade and Industry also has a number of programmes to support local exporters and investors, including, inter alia, Export Marketing and Investment Assistance, the Capital Projects Feasibility Programme and the Manufacturing Competitiveness Enhancement Programme – schemes designed to enhance the competitiveness of South African companies.
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 56 8. ANNEXURES
8.1 COTE D’IVOIRE GEOGRAPHICAL DISTRIBUTION OF ECONOMIC ACTIVITY
SOURCE: HTTP://WWW.LIB.UTEXAS.EDU/MAPS/AFRICA/IVORY_COAST_ECON_1972.JPG
8.2 COTE D’IVOIRE SHARE OF INTRA-REGIONAL TRADE IN WEST AFRICA
SOURCE: CEPICI
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 57 8.3 ELECTRICITY DISTRIBUTION NETWORK OF COTE D’IVOIRE
SOURCE: CEPICI
8.4 TRANSPORT NETWORK OF COTE D’IVOIRE
SOURCE: CEPICI
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 58 8.5 PORT OF SAN PEDRO CONTAINER TERMINAL EXPANSION
SOURCE: CEPICI
8.6 AFRICAN UNDERSEA CABLES
SOURCE: HTTPS://I1.WP.COM/MANYPOSSIBILITIES.NET/WP-CONTENT/UPLOADS/2008/10/AUC_NOV14.JPG?RESIZE=640%2C605
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 59 NOTES
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 60 NOTES
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 61 NOTES
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 62 NOTES
ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 63 ECIC l TRADE AND INVESTMENT OPPORTUNTIES IN AFRICA: COTE d’VOIRE 64