Index trend
Previous Quarterly Editions
Expropriation risk: 49 48 48 51 ▲ Political violence risk:48 48 48 48 ►Terrorism risk:43 41 41 40 ►Exchange transfer and trade sanction risk: 55 54 45 45 ►Sovereign default risk:65 65 65 57 ▼
Overall Risk Temperature: 50 (Medium -1) TREND ▼
Special topic: Political polarization
Cote d’Ivoire has experienced impressive economic growth and political and social stability over the past 15 years, following civil wars in 2002–2007 and 2011, each rooted in ethnic, religious and regional polarization.
Ethnic and religious divisions, cynically exploited by domestic politicians, came close to destroying the West African country, which has since struggled to put its troubled past behind it. Cote d’Ivoire will face a stiff test in the 2025 presidential election due in October. The last ballot, in 2020, passed without the resumption of civil disturbance that many had feared. Some 80 people were killed, but that was sharply down from more than 3,000 in 2011.
Ethnic and religious polarization has greatly diminished compared with the 2002 and 2011 conflicts but has by no means been eliminated, and memories of past suffering remain raw. Since 2011, Cote d’Ivoire has experienced average economic growth of 8% of GDP — hailed as the fastest in the world — under President Alassane Ouattara’s Rally of the Republicans party. Despite criticisms of imposing a ‘victor’s justice’ on opposition supporters, Ouattara has sought to heal past wounds with an ambitious public investment program aimed at an across-the-board improvement in living standards.
Ethnic, religious and political polarization have been rising in the run-up to the October ballot as Ouattara appears to be seeking an unconstitutional fourth term, and former President Laurent Gbagbo — who played the major role in instigating the 2002 and 2011 conflicts — has declared his intention to run again despite being barred by law from high office. Although there are likely to be multiple candidates running for president, including former Credit Suisse CEO Tidjane Thaim, the outcome is far from predictable.
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Foreign cocoa buyers such as Barry Callebaut, Cargill, Ferrero Roche and Mars are facing renewed conflict with Ivorian cocoa traders who are demanding a revision of their fixed-price contracts to enable them to benefit from the surge in the international price of cocoa. Cocoa prices were $10,000 per ton on the New York Stock Exchange in February — albeit down from a peak of $12,500 a ton in December — and are likely to remain elevated for the foreseeable future due to climate change-related poor harvests.
During the 2023–2024 harvest, climate change added an extra three weeks of 32 degrees centigrade or more to summer temperatures, which withers the crop on the vine, slashing yields and triggering price rises. Farmers and traders are therefore demanding a revision in contracts agreed upon last year in order to share in the cocoa price bonanza.
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The long-running antagonism between former President Gbagbo, 80, and President Ouattara, 83, both of whom have signaled their intention to run again in the October presidential ballot, does not bode well for hopes of a relatively peaceful election. Apart from the advanced age of both candidates, the resumption of their political rivalry runs the risk of triggering painful memories from the 2002 and 2011 conflicts, which could easily spill over into renewed street violence. This risk may decline abruptly if Ouattara steps down, as he said he will if “others” pass leadership onto a new generation.
The ballot is nonetheless likely to be more contentious than normal, both because of the high number of candidates and because of a recent uptick in Russian interference in Ivorian politics, which has systematically sought to undermine the democratic process in the country.
Moscow has mounted a series of aggressive disinformation campaigns designed to foster distrust in Ivorian politicians and institutions — including a TikTok video announcing the overthrow of Ouattara in a coup that garnered 6 million views — along with fake news designed to fan pro-Russian and anti-French sentiment.
France officially returned its Port Bouet military near Abidjan to the Ivorian government in February, signaling the end of its 47-year presence in the country, after earlier announcing its intention to cease its military presence in the country entirely. The withdrawal of some 900 French troops has raised fears of Cote d’Ivoire being exposed to an increased risk of terrorist attacks, although Ouattara cited the ‘modernization’ of the military as the reason for the withdrawal. Perceptions of neo-colonialism and rising anti-French sentiment across Francophone Africa likely lie behind the decision.
The risk of terror attacks from neighboring Burkina Fasso, Niger and Mali continues to pose a threat to Cote d’Ivoire, although it has been five years since the last major incident.
Finance Minister Adama Coulibaly unveiled a 15,339 billion CFA franc ($24 billion) budget to parliament in November, up 11.8% on the 2024 budget. One-third of it will be financed by domestic and external borrowing. The budget projects a fall in the fiscal deficit to 3% of GDP, the stabilization of the debt-to-GDP ratio at 58% — low for a sub-Saharan African sovereign — along with further support for social and infrastructure spending. Debt servicing now accounts for 26% of the budget, but innovative efforts are under way to reduce the annual debt service burden.
Economic growth is forecast to reach 6.3% in 2025, and with inflation hovering at around 2.2%, the short- to medium-term outlook appears buoyant. Economic growth is forecast to reach 6.3% in 2025, and with inflation hovering at around 2.2%, the short- to medium-term outlook appears buoyant, despite the negative repercussions of Russia’s invasion of Ukraine and the tightening of monetary policy in the developed economies. An International Monetary Fund-approved aid package of $350 billion (spread over 40 months) will help the government manage such external shocks and assist in the funding the government’s $20 billion development plan. Under Ouattara’s three terms in office, Cote d’Ivoire’s GDP has doubled. Under Ouattara’s three terms in office, Cote d’Ivoire’s GDP has doubled.
Cote d’Ivoire and the World Bank in December announced an innovative debt swap designed to reduce Abidjan’s overall debt profile and help cut debt servicing obligations. Cote d’Ivoire was one of the first African sovereigns to sell a dollar-denominated bond in 2024 for two years, but it had to pay a premium of more than 8% to raise $2.6 billion. The World Bank will underwrite a loan for Abidjan to buy back 400 million euros of debt and replace it with a new debt-for-development loan at a lower interest rate, creating a saving of €60 million that will be allocated to the education budget.
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S&P and Fitch upgraded Cote d’Ivoire’s sovereign debt rating to BB with a stable outlook from BB– at the end of 2024 — two notches away from the coveted investment-grade status — on the back of strong economic growth, shrinking fiscal and current account deficits, buoyant cocoa prices, a stable debt outlook, and rising exports of hydrocarbons and other minerals such as gold and manganese.
The sovereign debt upgrade should help further reduce the cost of borrowing, while additional upgrades to investment-grade status would open up the Ivorian economy to investment from developed-world pensions funds whose mandates currently prohibit them from investing in B-rated African sovereigns, thereby providing a welcome stimulus to much-sought-after inflows of foreign direct investment.
Cote d’Ivoire last year overtook South Africa to become the highest-rated sovereign in Africa as a result of its robust macroeconomic performance and buoyant economic outlook along with a debt-to-GDP ratio expected to fall to 50.8% by 2027.