Previous Quarterly Editions
Expropriation Risk: 45 43 45 48 Political Violence Risk: 62 62 62 63 Terrorism Risk: 38 38 38 39 Exchange Transfer and Trade Sanction Risk: 45 45 42 44 Sovereign Default Risk: 38 38 37 37
TREND ▲ OUTLOOK ▲
The country’s political landscape is already dominated by the run-up to the presidential elections in October. Guillaume Soro, who led the coalition of youth militia and rebel forces known as Forces Nouvelles from the Muslim north of the country in the 2010-11 civil war, officially announced his candidacy in late 2019 although he has been signalling his intention for some time. Soro, who was previously prime minister and then speaker of the National Assembly, marked his official entry into the race by accusing President Alassane Ouattara’s ruling party, the RHDP, of beating and killing opposition activists, possibly to deflect attention from the civil atrocities associated with the Forces Nouvelles. His request for extensive external monitoring of the vote is already sowing doubt about the legitimacy of the outcome in October. Although it is a decade since the civil war, which broke out when Laurent Gbagbo and Alassane Ouattara both claimed to have won the 2010 presidential election, many Ivorians fear that the failure to achieve a formal reconciliation between the two sides means that this year’s election could see violence break out again. Ouattara, 77, has yet to declare whether he intends to run for a constitutionally questionable third term, while former president Henri Konan Bedie, 85, and Gbagbo himself, 74, could also be presidential candidates. Gbagbo is currently confined to Belgium while the International Criminal Court (ICC) hears an appeal against his acquittal in early 2019 on charges arising from the fighting in 2010-11. None of the three main parties, the RHDP, the PDCI and the FPI, has a big enough lead to win the presidency outright in the first round, and both Soro and Bedie have visited Gbagbo in Brussels apparently to discuss an anti-Ouattara alliance. Meanwhile, President Ouattara’s attempt to block Gbagbo’s acquittal is widely seen as an attempt to keep him out of the 2020 contest. In a cabinet reshuffle in September, Prime Minister Amadou Gon Coulibaly retained his position and looks likely to be Ouattara’s running mate, but the team around the president was strengthened in preparation for the October presidential contest. Ouattara will benefit from an economy that looks likely to grow by 7% in 2020. Although foreign investment is slowing ahead of the election, economic performance remains strong and the country’s fiscal deficit is expected to fall to the regional average of 3% during 2020. The government ended 2019 by courting ‘expressions of interest’ in five more offshore oil exploration blocks, having successfully auctioned off blocks to Total and Eni earlier in the year. The country has reserves of 100 million barrels of oil and a trillion cubic feet of gas, and the government is working to attract significant new investment into its small but rapidly growing hydrocarbons sector as a means to ease the economy’s overdependence on cocoa exports.
Abidjan continues to face a possible US ban on imports of Ivorian cocoa because of the use of child labour. A government team from Washington visited cocoa plantations in late 2019 as part of a Senate-sponsored investigation into the use of children on farms, after evidence emerged that a voluntary agreement with leading chocolate manufacturers has not come close to ending the practice. The Ouattara government is responding by trying to raise the price paid for cocoa so that more money reaches farmers to pay labourers, but the risk of a showdown with Washington this year is rising. The floods that ravaged the Grand Bassam coastal resort between late September and early November caused tens of millions of dollars of damage to a historic area and major tourist attraction. Coastal erosion is a serious problem for West Africa, and Côte d’Ivoire in particular, and developing an effective response to climate-related challenges looks set to be a central issue in the presidential elections.
With Guillaume Soro now officially in the presidential race, there has been a sharp rise in tensions between his supporters and those of President Ouattara. While this is not expected to produce instances of violence during the first months of 2020, the potential for clashes will rise from mid-year onwards. As price rises for utilities, especially electricity, have been delayed until after October, there should be few protests about the economic situation as the percentage living below the poverty line has fallen from 28% to 20% under Ouattara. Although considered low at present, there is also a risk that serious clashes around the election could enable jihadists to gain a foothold in the north of the country.
Côte d’Ivoire and neighbouring Ghana are two of the most stable and prosperous countries in West Africa but both have been affected by the wave of deadly jihadi insurgent attacks that have taken place in the region in recent years. The 2016 attack on a tourist resort left 16 people dead. The two attacks on government forces in neighbouring Mali during November that together killed more than 80 soldiers underlined the continuing threat in the region.
TREND ▲ OUTLOOK ▼
While visiting Abidjan in December, President Macron announced that the eight members of the West African Economic and Monetary Union (WAEMU) would replace the CFA franc with the new Eco during 2020. The Eco will still be pegged to the Euro, but WAEMU members will no longer have to deposit 50% of their foreign exchange reserves with the French Treasury. President Ouattara will play a significant role in the transition ahead of the October elections.
TREND ► OUTLOOK ▲
Unlike several other frontier markets in Africa, the country does not face a balance-of-payments crisis, near-term debt distress, or unmanageable deficits. Its external public debt is relatively low at below 40% of GDP and the recent positive assessment of the economic outlook from the IMF has helped to boost confidence in the country’s medium-term prospects despite the concerns about this year’s election. Ouattara continues to retain the confidence of investors and the wider international community, where his reputation for effective economic management is untarnished, and Abidjan remains in a favourable position to tap international capital markets again should it need to do so.
Return to contents Next Chapter