Ivory Coast Report

InterviewsJuly 22, 2014

Embassy of France in Côte d'Ivoire: Ivorian Economy and Business Climate

Jean-François Bijon, Economic Counselor at the Embassy of France

: Written by Ben Novak; Published: July 22, 2014

Interview with Jean-François Bijon, Economic Counselor at the Embassy of France in Côte d'Ivoire

Let's start by discussing the general climate in the West African region. How would you evaluate the current business climate in the region? And, secondly, what is the business climate like in Côte d'Ivoire in particular?

Generally we try to give common features to all regions. It is not really applicable here, as this is a fairly heterogeneous region. There are countries that now have a tradition of democratic change in institutions, such as Senegal and Ghana. There are countries that have a high monetary stability, as the countries of the franc zone, and others that do' have such stability: Ghana for example is facing great challenges today. There are countries with phenomenal oil wealth, and others that do'. There are countries with an important agricultural potential, and this is really the characteristic of Côte d'Ivoire. So you can build a whole future based on this wealth. It's true that agriculture depends on foreign investment, but it depends first on domestic investment. So this is what most characterizes Côte d'Ivoire. So above all these countries with obvious natural resources, Côte d'Ivoire has an extraordinary agricultural base.

I think that the current figures show that there is a very clear change. At the same time, they are the expression of a recovery; there is a kind of boom that is somewhat the result of the return of civil peace. There are many opportunities.

Is it possible to compare Côte d'Ivoire to Ghana for example, which is right next door and also has great potential and dramatic progress in economic terms while being a small country? Côte d'Ivoire which is a greater country took a little delay. Do you see any changes taking place, any catching up?

Yes, Côte d'Ivoire is catching up. I do' want to speak ill of a neighbouring country, but Ghana has made very important progress and now is back to some normality, with several challenges as a result of this strong growth. Ghana is now facing problems such as decrease in the debt capacity, inflation and borrowing by enterprises, despite its local wealth. Côte d'Ivoire got delayed by 15 years when compared to Ghana, but today things are restarting. I believe that Côte d'Ivoire is intended to be a reference to the region again. However, the difference between now and 20 years ago is the notion of ECOWAS which became important for leaders. I feel that Côte d'Ivoire has a particular interest in strengthening exchanges with Ghana and Nigeria. This trinomial is gradually taking place; three countries that are not yet strongly related in political relations and relations between enterprises —and yet things are evolving tremendously. Nigeria is the largest economic partner of Côte d'Ivoire even though the partnership concerns one product and one structure only, which is the refinery.

Nigeria is a partner of Côte d'Ivoire, it is true that there is a language barrier and until now the trend has been that English-speaking countries partnered up and francophone countries likewise.

It's true, but the trend is changing very quickly, here we can see that almost all executives speak English, so it is no longer a problem.

What has changed since the conflict and what is the situation in Côte d'Ivoire today?

Firstly, there is the effect of a return to civil peace, which has a very strong effect on agriculture. It's well known that in an agriculture-based country like Côte d'Ivoire, if there is conflict, it penalizes agriculture, if there is peace, it helps the sector to revitalize. However, even during the conflict times the country became (especially the northern part of Côte d'Ivoire) a leading producer of a new product which is cashew. There is no region in Côte d'Ivoire which is hopeless in terms of research in agricultural products. Production remains low, which means that there are very important opportunities for growth.

Secondly, the new authorities set six priority areas for rebuilding the country: roads, water, electricity, health, poor sanitation and education. Reconstruction in these areas is uneven, but the road program has been put in place and today we no longer drive as we did 4 years ago. Water was in a dire situation as a third of the population of Abidjan had no access to it. Now there is huge work being done, these are long and heavy works, so we are just starting to see the result. Both the road works and water works change the state of mind; we see the change that is starting to take place. This is extremely interesting. Health is also one of the sectors that is now in the process of reconstruction. The healthcare system remains in a dramatic state, so there still a tremendous job to be done. Concerning education, there has been the reconstruction of the university which was among the priorities of the plan. So we can feel the difference, we even see the difference. The construction of the third bridge will change the lives of the inhabitants of Abidjan; today it is creating traffic jams but it will certainly change tomorrow through a substantial improvement in the city traffic.

We are seeing growth figures that are quite spectacular, around 9% per annum. Do you consider they are correct, is the growth real?

I believe that what is really interesting is the evolution of the figures and not their absolute values. These are numbers that apply to a small economy, and it's still a small economy, so you can more easily have significant numbers than in a European or North American economy. I think that the current figures show that there is a very clear change. At the same time, they are the expression of a recovery; there is a kind of boom that is somewhat the result of the return of civil peace. There are many opportunities.

And indeed, are there areas that emerge, that are expanding and becoming more important, with a strong growth? You just talked about agriculture…

Real estate is extremely interesting. Experience shows that when real estate starts to pick up, something is happening. There have been relatively few real estate investments over the past decade, today it is the opposite, and it is a bit crazy. Essentially private real estate development, but also public real estate development companies, divided into different categories of real estate standards, which is rather very encouraging. The city is extending increasingly; today you have almost no differences between Abidjan and Binger Ville. If you take this route, you see all the growing real estate sites. It's at the same time activity sector and behaviour: it's a shared belief that the future deserves this type of efforts.

The second domain is related to all sectors of the logistics. As the country is once again united, and the activity can redevelop everywhere, the role of Côte d'Ivoire and in particular the northern route from Abidjan to supply this small sub-region takes all its importance. There are now plans to establish a new route from San Pedro, heading northwards from San Pedro, so all these areas of logistics and heavy infrastructure of communication are extremely interesting.

Côte d'Ivoire is perhaps the country where the consumer of electricity is the least badly off. It could indeed be much better; Côte d'Ivoire is intended to supply neighbouring countries with electricity. There is also a huge potential for hydroelectricity for example, and there are projects that are beginning to develop. So I think that what explains the current activity is small private investment that will affect housing and very large public investment or public-private partnership, with a host of big companies or subcontract.

What is the place reserved for foreign investors who enter to this country in the current booming period? In which areas should they invest?

Côte d'Ivoire is traditionally an open country, and has always been so. It begins with the movement of people, immigration is open to people of the region and the country has traditionally always been open to foreign investment. Thus you have none of the phenomena that you see in many other parts of the world where there is a limitation of areas that are open to foreign investment, or the obligations of partnership, capital partnership or partnership with national companies. It does not exist here, or even if it exists it is for extremely limited areas: opening a grocery store that would probably be difficult, but it is a fundamentally open country. On the other hand, you have foreign communities living here for a long time, who continue to maintain this openness to the outside world. But at the same time as some of these foreign immigrants (French, Lebanese, etc.) are here for a long time, they became part of the country. I do' know whether we can continue calling them foreigners, their lives are here, they have built some very important groups, which are Ivorian groups…

Today we see new investors coming, for example in agriculture, it is extremely interesting, there are French companies as well, in agriculture in the fields of banana, palm oil, etc. It helps feeling optimistic about the long-term.

Finally, can you summarize the role of the Embassy and your role here? What can you bring to other French institutions? What have you done recently that could illustrate it and what are the future projects? What are the major projects that you are performing with companies?

Clearly our first job is analysis, at least for this economical service; it's to understand the economic and financial situation of this country, and build relationships with people and institutions that allow understanding what is happening and what are the drivers of the local economy.

Beyond monitoring of state-state relations, supporting companies is a key activity. Effectively, they need these analyses, this look on the exact situation beyond some rumours, as well as our own analysis over the medium term.

I think we play an advisory role. To take an example, after the post-election crisis, we believed that this country will restart heavily in economic terms, so their needs will be important. It was obvious that French companies only ca' meet this need. So our speech could in no case be: Côte d'Ivoire and French companies alone will succeed to achieve things here. Instead we must accompany the opening of Côte d'Ivoire to the world, and of course ensure that French companies have a place in this opening. This is what is happening at the moment; it is a kind of global consensus, with more and more triangular cooperation.

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Ivory Coast Report

Embassy of France in Côte d'Ivoire: Ivorian Economy and Business Climate

Jean-François Bijon, Economic Counselor at the Embassy of France

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