# data[].attributes.attachment_link.readable_text
As many economies in Africa wrestle with the consequences of a slowdown in China and depreciating currencies, Ivory Coast has bucked the trend. The country is enjoying strong growth and focusing on infrastructure projects, job creation, and improving its business climate to win back investors after years of political paralysis.

Leading the economic charge is former Goldman Sachs trader Abdourahmane Cissé, the 34-year-old budget minister, who says the world's top cocoa producer is strong enough to weather external shocks, while stability is almost guaranteed.

Ivory Coast has been frozen in political stasis since rebels seized the north in 2002, causing the effective division of the former French colony and years of tensions, culminating in a four-month civil war that killed about 3,000 people in early 2011 after former president Laurent Gbagbo refused to accept defeat at the ballot box.

Gbagbo and youth leader Charles Blé Goudé are now on trial at the international criminal court for crimes against humanity. The short-lived conflict ended when Alassane Ouattara took office after a military intervention by France. Ouattara was re-elected by a landslide last year and, despite some fears of unrest, the poll was peaceful and seemed to confirm a return to stability.

The economy is booming - growth is estimated at 9% for 2015 - and foreign money can be seen in the new malls and hotels springing up in the economic capital, Abidjan. Ouattara, a former official at the International Monetary Fund (IMF), has spent billions of dollars rebuilding roads and railways.

"There is a new vibe, you have a middle class that is gradually emerging ... We have invested a lot in infrastructure," says Cissé during a trip to London. He added that a return to violence was simply not an option. "Ivorians know what the price of peace is. They went through big issues when we had the trouble in 2010. No one wants to go there again ... Every Ivorian wants their kids to go to school.

"Because I come from the private sector, I always look at downside-upside risk. I used to be a trader so risk is part of my DNA. Since 2011, the president has wanted to put a strong focus on a diversified economy. Our economy now is really diversified." He pointed out that the service sector now accounts for about a third of the economy.

One concern for observers, however, has been the ratio of debt to gross domestic product, which stands at about 40%. Because some of that debt is in dollars, repayment costs are rising - a problem experienced by several African countries. Cissé says his government has factored this in.

"We know exactly what it is in our books and we manage it on a daily basis," he says, noting that the stated level of concern for the West African Economic and Monetary Union is 70%.

"We are at 40%. We still have room, but we don't want to go to 70% and that is why we are putting a strong emphasis on domestic revenues because if we make sure that we mobilise our resources internally, it gives us a bit more leverage to finance our economy," says Cissé.

After visiting Abidjan in February, Mitsuhiro Furusawa, the IMF's deputy managing director, said that to maintain growth Ivory Coast must reform the business environment and boost private sector investment. "Although declining ... poverty, inequality and unemployment remain high and significant regional disparities still exist," he cautioned, urging the government to mobilise revenues and maintain a disciplined fiscal policy, partly to counter external shocks and contain the increase in public debt.

Cissé said the government plans to spend $60bn (£42.5bn) on infrastructure between 2016 and 2020, with the private sector funding 68%.

Another priority is creating productive jobs for young people. In a report last December, the World Bank warned robust growth was not leading to a significant decline in the poverty rate or higher incomes for people living below the poverty line. The bank's economists recommended boosting productivity in self-employment, wage employment and agricultural employment.

As a first step, says Cissé, the government wants to focus on education. "Yes, you have to create jobs, but we also want value-added jobs. We want to have young people who, when they leave university, have the right skills to be employable ... We invest 22% of the budget into education to make sure we have trained people who are ready for the market," he says.

The government has also reduced the cost of creating companies by more than 70% - Cissé said you could now create a company for less than $30 - and introduced a two-year tax break to help new firms. The government has also said 20% of public tenders should go to small and medium-sized enterprises. The quota is not compulsory, but that will be reviewed at the end of the year.

Buildings in the Plateau district in Abidjan, Ivory Coast. Photograph: Joe Penney/Reuters

The process of applying for public tenders has also been streamlined and the government is providing tax incentives for companies that hire students straight out of school and for a minimum of 12 months. "The president understands that we have a population of mainly young people and we need to make sure this becomes an asset rather than a liability," Cissé said.

Key to attracting private investors is the business environment. Ivory Coast ranked 46th out of 189 countries for ease of starting a business in the World Bank's annual Doing Business report, but stood at 142nd for ease of doing business.

The budget minister sees opportunities in natural resources, such as oil and gold, after years of underinvestment. "These are potential revenues for the future because we will continue to invest ... and when the price goes a bit higher, I'm likely to collect a lot more money to finance the economy," he says.

"There is an appetite [for investment] ... We want to position ourselves as a place where there is stability, the business environment is attractive, and where you can do business and close your eyes, like you do in other countries, and have an interesting return."

# data[].attributes.attachment_link.title
Ivory Coast hopes to tempt investors with stability and a booming economy | Clár Ní Chonghaile

# data[].attributes.attachment_link.description
After years of political turmoil, Ivory Coast's budget minister hopes booming economy and improved infrastructure will create climate to attract investment

# data[].attributes.attachment_link.readable_text
Bad news has emerged this week for chocolate lovers: it's going to get more expensive to satisfy your cravings.

The cost of wholesale cocoa beans soared to the highest level in more than a decade, and manufacturers are betting prices of the key chocolate ingredient will stay elevated through 2024. That's mainly because production in West Africa, a region that accounts for two-thirds of the world's bean harvest, is faltering.

Heavy rains and a rot-causing disease have ravaged crops there, sparking concerns about supply. Bean processing has also slumped around the world - which is crucial for turning products into chocolate - indicating that factories are struggling to access adequate volumes, according to Fuad Mohammed Abubakar, the head of Ghana Cocoa Marketing Company UK.

That's prompted executives from top manufacturers Lindt & Spruengli AG and Hershey Co. to warn this week that further price hikes can't be ruled out, even after consumers have already had to swallow higher costs for their products.

"We clearly are in a very tight situation," said Paul Joules, a cocoa analyst at Rabobank in London. "We could see chocolate companies adopt smaller chocolate bars and potentially higher prices."

The world's biggest cocoa producer Ivory Coast is expected to see its upcoming harvest shrink by nearly a fifth from last year, and has suspended sales that bind farmers to delivering goods at specified times in the future. In Ghana, the second-biggest cocoa producer, output is set to fall below historical averages.

That's likely to put the world on track for a third consecutive supply deficit this year and possibly even the following, according to Joules. An El Niño weather pattern threatens to hurt output further, just as farmers contend with the swollen-shoot virus, a devastating disease that can kill trees within years, and black pod disease, which causes beans to rot.

While the pandemic led to a slowdown in global chocolate demand and caused cocoa stockpiles to surge, recovering consumption and two years of supply shortages have significantly reduced those inventories. Lindt is building up its cocoa bean stocks as a buffer against higher prices and shortages, it said this week. Both Lindt and another Swiss chocolate maker, Barry Callebaut AG, have seen sales volumes suffer as higher prices force consumers to hold back.

For some companies, the effect of soaring wholesale costs might only just be filtering through, due to previous hedging activities that so far shielded them from big price hikes.

"For most players, the impact of the very steep cocoa future prices increases will only kick in from the second half of 2023," Lindt's Chief Financial Officer Martin Hug told analysts in an earnings call on Tuesday. Those feeling additional cost pressure "will therefore most likely feel a need to adjust pricing."

Subscribe to the CFO Daily newsletter to keep up with the trends, issues, and executives shaping corporate finance. Sign up for free.

# data[].attributes.attachment_link.title
Chocolate inflation won't quit as the wholesale cocoa cost soars to the highest level in over a decade

# data[].attributes.attachment_link.description
Production in West Africa, a region that accounts for two-thirds of the world's bean harvest, is faltering under heavy rains and a rot-causing disease.

# data[].attributes.attachment_link.readable_text
The country is hosting the Africa Cup of Nations soccer tournament 13 years after a bloody civil war that crippled the nation

Young soccer players in Korhogo, Ivory Coast; January 17, 2024. FADEL SENNA (AFP)

Just 13 years ago, Ivory Coast was torn apart by a bloody civil war. On January 13, in Abidjan, the city once plagued by violence, President Alassane Ouattara inaugurated the African Cup of Nations (CAN). This event will not only showcase African soccer, but also the amazing economic turnaround of Ivory Coast. With an investment of around $4.56 billion, the country has improved its infrastructure, including stadiums, roads and lodging. The country anticipates two million visitors for the CAN tournament, aiming to showcase its reliability and safety while solidifying its position as an economic power in West Africa.

"Quantifying the CAN's impact may be challenging, but it will clearly yield positive results for the country's infrastructure and reputation as an attractive investment destination," said Moutiou Nourou, the Abidjan coordinator for the Ecofin information agency. "New roads have improved access to isolated areas and eased traffic in crumbling cities. Affordable real estate developments are emerging, benefiting the services sector. Our country is attracting growing interest from large foreign companies."

Six soccer stadiums, roads, airports, hospitals and hotels have been built or renovated in the five cities hosting the tournament: Abidjan, Buaké, Korhogo, San Pedro and the capital, Yamoussoukro. The government invested $1.09 billion and the country received a loan of $3.47 billion from the International Monetary Fund (IMF) to host what President Alassane Ouattara calls "the most beautiful Africa Cup of Nations in history... that will achieve a resounding success to bring even more glory to our country."

The current state of euphoria is built on strong economic foundations. According to the World Bank, Ivory Coast's gross domestic product (GDP) has risen from less than $43 billion in 2013 to nearly $70 billion today. With an annual growth rate of 6%-7%, the country is on track to become the region's second-biggest economy after Nigeria. This progress is largely due to the stability regained after the 2010-2011 civil war, alongside the export success of coffee, cocoa and oil. As a result, Ivory Coast has become a prime investment destination in West Africa. Trust is the most frequently used word in relation to the country, and its main objective in hosting the CAN is to showcase the country's favorable business climate to the world.

CAN matches will be televised in 155 countries, and more than 5,000 journalists have been accredited to report on the 24 teams competing. Local companies have also jumped on the bandwagon. Dabali Xpress is a fast food company started in 2021 by Olivia Akouba Angola. Its remarkable success has led to being chosen as the official food provider for CAN spectators in every stadium. Shortly after being selected, the company raised $1.6 million to enhance its capabilities. Known for local dishes delivered quickly to your doorstep, Dabali Xpress exemplifies the economic dynamism of Ivory Coast.

Ivory Coast's main challenge is for its newfound wealth to trickle down to everyone. From 2015 to 2020, the poverty rate decreased from 46% to 39%, indicating a significant portion of the population still faces severe challenges. In cities like Abidjan, the high cost of living is a common complaint due to inflation hovering around 4%. The impact of Covid-19 and the Ukraine war has exacerbated inflation in recent years. The government announced a 10% hike in electricity rates after the CAN, which is increasingly burdensome for those living on the edge. "Despite the progress made, we still have significant inequalities that persist. Addressing them through social measures continues to be a challenge," said Nourou. While there are concerns about the country's foreign debt (60% of GDP in 2022), the country is far from defaulting thanks to strong backing from the IMF.

France's steadfast support

Unlike its neighboring countries Mali, Niger, and Burkina Faso, which have increased military cooperation with Russia after their respective coups d'état, Ivory Coast remains France's last major ally in West Africa and is home to 900 French soldiers. While the northern border is threatened by Sahelian jihadism attacks, the overall sense in the country is one of security. The country has also been slowly recovering from the decade-long internal division that was not fully resolved after the civil war ended in 2011. After being acquitted of war crimes by the International Criminal Court in The Hague, former president Laurent Gbagbo's peaceful return to the country in 2021 helped heal more wounds.
Sign up for our weekly newsletter to get more English-language news coverage from EL PAÍS USA Edition
Last October, President Ouattara appointed Robert Beugré Mambé, a Methodist preacher and civil engineer, as prime minister and put him in charge of overseeing preparations for the CAN tournament. Mambé was given the important responsibility of building and improving stadiums, roads and bridges, leaving a significant legacy for Outtarra with elections scheduled for 2025 and the 82-year-old, three-term president considering retirement. In the coming weeks, Ivory Coast will capture the attention of the entire African continent, but this time it won't be because of war.

More information

# data[].attributes.attachment_link.title
Ivory Coast's economic success is a tale of triumph

# data[].attributes.attachment_link.description
The country is hosting the Africa Cup of Nations soccer tournament 13 years after a bloody civil war that crippled the nation

# data[].attributes.attachment_link.title
Empowering female cocoa farmers in Cote d'Ivoire - BORGEN

# data[].attributes.attachment_link.description
In 2020, according to the World Economic Forum, cocoa farmers in Cote d'Ivoire earned just $0.78 per day - below the extreme poverty line.

# data[].attributes.body
Ivory Coast aims to solve unemployment by boosting their economy and shifting jobs towards newly demanded jobs. The country innately has high rates of poverty, contributing to a lack of skills necessary for modern industries. Many families rely on traditional agricultural methods to afford their living. However, as the economy shifts towards marketing and productive sectors in the modern day, there is a mismatch between the skills demanded by new jobs and those possessed by the workforce. This causes structural unemployment due to a change in demand for certain skills.

Ivory Coast is aiming to increase more marketing jobs for young workers to be hired right after university and apply their education. Currently, even when young students graduate, their knowledge becomes useless as they are sent back to help their family with farming. There is a lack in the quantity of jobs itself; as agricultural skills become obsolete, Ivory coast is trying to solve this issue by increasing job opportunities for young workers.

# data[].attributes.body
Recently, Ivory Coast is experiencing rapid economic growth and development. The article attributes this success to several key factors, including political stability, diversification of the economy beyond traditional sectors like cocoa production, and government policies aimed at attracting foreign investment. Ivory Coast has also invested largely in infrastructure development, such as roads and ports, in preparation for the African Cup Nations (soccer). All changes factor as improvements in the FOP, leading to long-term economic growth and ability to produce greater potential GDP. Additionally, it discusses challenges faced by Ivory Coast, such as income inequality and the need for continued investment in education and healthcare to sustain long-term development as a result of the economic growth.

# data[].attributes.body
In 2020, according to the World Economic Forum, cocoa farmers in Cote d’Ivoire earned just $0.78 per day – placing them well below the extreme poverty line. Also, one of the greatest issues of inequality is on gender: while it is not uncommon for women to run cocoa farms, they are often not reimbursed for their work and find difficulty in maintaining their businesses.

# data[].attributes.attachment_link.description
The benchmark interest rate in Ivory Coast was last recorded at 5.50 percent. This page provides - Ivory Coast Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news.

# data[].attributes.attachment_link.readable_text
Business News of Thursday, 21 December 2023

A tax incentive announced in 2016 to enable cocoa grinders to build capital and expand capacity has been stopped by Ivory Coast as it moves to meet revenue goals under an International Monetary Fund program, dealing a blow to foreign companies that make up the majority of domestic processing.

Exporters had to pay higher excise taxes for overseas sales of beans. The duty for processing the commodity locally into cocoa products or chocolate itself was lower at between 13.2% and zero percent. That has recently ended and the government now requires all companies in the cocoa value chain to pay the full 14.6% tax, according to people familiar with the matter.

The decision will impact the amount of cash available to companies that grind cocoa beans locally, such as Cargill Inc., Olam International Ltd. and Barry Callebaut AG, to invest in their plants. It's not yet clear how the rollback of the incentive will affect the top grower's latest projection of boosting its grinding capacity to about 1.4 million tons by 2028 from 972,040 tons in 2022.

Minister of Finance and Budget Adama Coulibaly did not answer phone calls and a text message seeking comment.

The rise in grindings in Ivory Coast - the world's largest grinder - has drawn share away from more established markets like Europe and North America. It's also added to a trend of commodity producers - from Vietnam in coffee to Indonesia in palm - seeking to benefit from a bigger portion of the supply chain by processing crops locally.

The choice to ask companies to pay the full applicable tax rate was necessitated by the country's terms of agreement for an IMF loan program which seeks to end some subsidies and tax exemptions to increase government revenue, the people said.

Ivory Coast agreed to a $3.5 billion extended fund facility and extended credit facility with the IMF in May. Upfront domestic revenue mobilization is a central pillar of the program, seen to help the country increase tax revenue by 0.6% of gross domestic product to 14.5% of GDP in 2024, IMF said in a staff note this month.

# data[].attributes.attachment_link.title
Ivory Coast stops cocoa grinding tax incentive to meet IMF goal

# data[].attributes.attachment_link.description
A tax incentive announced in 2016 to enable cocoa grinders to build capital and expand capacity has been stopped by Ivory Coast as it moves to meet revenue goals under an International Monetary Fund program, dealing a blow to foreign companies that...

# data[].attributes.body
The government's decrease in income tax increases consumption (C), as households have more disposable income to spend. Since C is a component of aggregate demand (AD), this is represented as a shift in the AD curve to the right, increasing output and price level. Such will close a recessionary gap that persisted at AD₁, producing Yrec, through an expansionary fiscal policy. In the end, the optimal goal of the government is to reach PL2 and Yp, producing potential output.

# data[].attributes.body
Ivory Coast's policy of removing tax incentive for cocoa grinders is a fiscal policy aiming to increase government revenue and end inflation.

Ivory Coast agreed to a $3.5 billion extended fund facility and extended credit facility with the IMF in May 2023. One of the key pillars of this IMF program is upfront domestic revenue mobilization, which involves ending certain subsidies and tax exemptions to boost government revenue. By removing the tax incentive that allowed cocoa grinders to pay lower excise duties between 13.2% and 0%, and instead requiring them to pay the full 14.6% tax rate, Ivory Coast is aligning its fiscal policy with the IMF's conditions for the loan program.

Consequences:

The removal of the tax incentive contributes to fiscal consolidation efforts by increasing government revenue. This aligns with the IMF program's goal of reducing the budget deficit to 3% of GDP by 2025 and stabilizing public debt below 60% of GDP.

The removed tax burden on cocoa grinders may translate into lower prices for cocoa products, contributing to deflationary pressures in the economy. This could potentially affect Ivory Coast's goal of increasing domestic cocoa processing capacity and capturing more value from the cocoa value chain.

While the policy aims to improve fiscal sustainability, it may impact the cash flows and investment capacity of cocoa grinders, which are predominantly foreign companies.

# data[].attributes.body
Ivory Coast's central bank policy of increasing interest rates is a contractionary monetary policy, where an inflationary gap is closed by a fall in aggregate demand (AD).

Higher interest rates, and thus higher borrowing rates, leads to lower investment in firms and consumption (savings) in consumers. Both decreases AD, shifting the AD curve to the left. This causes output to decrease from inflationary Y₁ to Yp, potential output, and decreases price level from PL₁ to PL₂. However, unemployment will rise at the lower output.

# data[].attributes.body
In Ivory Coast, chocolate prices have been going through inflation. This is mainly caused by a supply shock - heavy rains and rot-causing diseases have destroyed the cacao beans crops for a sustained time. Continuing for a persistent amount of time, this has caused a cost-push inflation, followed by a fall in aggregate supply of cocoa beans, the main ingredients of chocolate, and price levels have risen due to scaracity.

Ivory Coast is expecting a harvest shrink of 1/5 from last year. Similar problems are arising in west African countries that also produce cacao beans. According to the article, the main issue is that chocolate companies do not generate enough revenue. Although the pandemic reduced global chocolate demand and created spare capacity of cacao bean stock piles for the last 2 years, the recovery rate is incredibly fast. Two years of having a supply shortage of chocolate has now significantly reduced the available chocolate inventory even after the spare capacity.

Linde and Kalabrt, two companies that import cacao beans from Ivory Coast, has observed their sales go down, as higher prices of chocolate now incentivize consumers to hold back on their consumption. Ivory coast’s domestic economy is also weakening as their main exports are lower.

# data[].attributes.body
The benchmark interest rate in Ivory Coast was last recorded at 5.50% as of February 2024. This represents an increase from the previous rate. Fitch Ratings, in affirming Ivory Coast's 'BB-' rating with a stable outlook in February 2024, noted that "Increased financing costs led to a higher interest-to-revenue ratio of 14.8%, up from 14.5% in 2022, despite monetary policy tightening."

This indicates that the Central Bank of West African States (BCEAO), of which Ivory Coast is a member, recently tightened its monetary policy by raising the benchmark interest rate to 5.50%. This rate hike led to increased financing costs for Ivory Coast's government.

The interest rate increase was likely implemented to combat rising inflation in the region. Inflation in Ivory Coast rose from 4.2% in 2021 to 5.2% in 2022, exceeding the 3% target set by the West African Economic and Monetary Union (WAEMU).By raising interest rates, the BCEAO aims to rein in inflation and maintain price stability across the WAEMU member countries, including Ivory Coast. Higher interest rates make borrowing more expensive, which can help cool demand-driven inflationary pressures.