Headwinds ahead

I’m lucky enough to have institutional access to Africa Confidential, and the latest edition of the newsletter makes for rather depressing reading. Economic headwinds ahead for Africa include a strong dollar, greater competition for the attention of western investors, troubles in China, devaluing African currencies, falling commodity prices, low oil prices, little set-aside for a rainy day… It all seems like a puncture in the inflating Africa Rising narrative.

According to AC, there are few shining lights on the horizon for the continent’s economies. Nevertheless from an Ivorian perspective, the country looks among the best positioned to at least stay afloat in this difficult upcoming period. Whether having well performing commodities (cocoa and coffee), little dependence on oil, a reasonable control of the wage bill, the third best economic growth in 2015, and having a stable currency…things do at least seem better than average, even if the overall global economic winds look less than favourable. Interestingly, AC even cited Cote d’Ivoire as having one of the highest value exports to other African countries, second only to South Africa (much of it probably refined oil products from the SIR).

The good news this week was the solid performance of the country in the WEF’s global competitiveness report. Cote d’Ivoire was the fastest improver, ahead of Ethiopia. Although in the AC’s categorisation (from the IMF), Cote d’Ivoire was in the category ‘fragile states’, I would think it’s likely the country will be increasingly classed with Ethiopia and Rwanda.

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The editorial meeting

Oh, to be a fly on the wall at the RTI (state tv) morning editorial meeting today. Here’s my imagined fictional account just for fun:

Editor: “Ok, folks silence, let’s make a start. [Quiet descends, nervous glances, visible stress] As you all know, the new government has yet to be announced…”

Evening news producer (ENP): “But the KOACI headline said “Remaniement, le nouveau gouvernement connu certainement ce mercredi” and it’s now Friday?”

Editor: “Go tell them to look up ‘certainement’.”

ENP: “But how long can this go on for? We’ve got a 30 minute news programme to fill this evening and not a single government minister to follow.”

Editor: “But we were promised a new dynamic ministerial line-up? And we already know the new PM?”

ENP: “Yes, but it’s the same guy as before!”

Intern: “But why don’t we get out there and gather some real stories away from the suits and ministers?”

ENP: “Impertinence! Where do you think this is, France 24? Our job is to tell Ivorians what each minister has done each day. That’s what news is, isn’t it? If people aren’t made aware of what the old men in suits have done – ceremonies, official speeches, formal visits, ribbon cutting – people will feel lost!”

Intern: “How about we get in our cars and gather some stories from the streets – you know the important developments that will really make a difference in people’s lives and the issues that concern people?”

ENP: “We tried that yesterday – we filmed some images of the harmattan dust…”

Intern: “…yes, but only 10 metres from the front door of our office…”

ENP: “That’s not fair – we even did a feature on the burns unit at the CHU Cocody hospital.”

Intern: “Yes, but that’s just round the corner from our office. How about…you know..leaving Cocody?”

Editor: “OK, enough of this insubordination. Can’t we just do what we did last night?”

ENP: “What? Show an extra long report on an old ceremony from several days ago that we already broadcast?”

Editor: “Sure. Or perhaps we could just rebroadcast the New Year’s address…”

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Ivory Coast – African country of the year 2015?

This post is both spurious and speculative, but if you had to select an ‘African country of the year’ in 2015, I would reckon Ivory Coast / Cote d’Ivoire must be in with a fighting chance. Not that I follow the other 53 countries on the continent quite as closely, but take that as a caveat. Here are a few reasons to believe that 2015 was a good year for the country.

Continental football champions (February)

It does seem a very long time ago now, but let’s not forget one of the highlights of the year – the generation of star players in the national football team finally winning the African Cup of Nations, with victory in penalties over Ghana. The tournament started with some of the lowest expectations for Ivory Coast in a decade, but all turned out well in the end. By the end of the year, Ivory Coast had recovered their place as FIFA’s top ranked African side.

Strong economic growth (May)

If 2015 was a year in which people started to feel the Africa Rising story was a bit wobbly with bad economic news out of China and low oil prices, Ivory Coast continued to hold its head high. Part of that story is about cocoa – a commodity which in 2015 bucked trends to maintain a high price (while Ivory Coast produced a record crop). Record Ivorian crops were also seen in cashew (pushing the country to become the world’s biggest exporter) and cotton.

The IMF currently predict real GDP growth of 8.2 percent in 2015, continuing the growth story started in 2012. A quick comparison with IMF projected 2015 growth elsewhere shows the country is up with the leading pack: Angola (3.5%), Cameroon (5.3%), Chad (6.9%), DRC (8.4%), Gabon (3.5%), Ghana (3.5%), Ethiopia (8.7%), Kenya (6.5%), Mozambique (7%), Nigeria (4%), Senegal (5.1%), Tanzania (6.9%), Uganda (5.2%). The stock market was the fastest rising on the continent, while the Ibrahim Governance Index put the country as the fastest improver. As a symbol of the revival I picked the African Development Bank annual conference in Abidjan in May, which celebrated the bank’s return to the city.

A peaceful election (October)

While the result was hardly a surprise, October’s presidential election could have gone a lot worse, and came after a very bad experience last time around (to say the least). Instead it was a peaceful transition to a second term for Alassane Ouattara. Ivorians learned that elections could take place without anyone having to die, and the Head of State got a strong mandate for his second term. The 2010-11 crisis was pushed a bit further back into the recesses of history.

Big infrastructure projects (December)

These were 12 months that started in December 2014 with the opening of Abidjan’s long-awaited ‘third bridge’ and ended with the new Commercial centre ‘Playce’ which includes sub-Saharan Africa’s first Carrefour and Burger King. In between you had various other bridge projects (notably at Jacqueville), roads (Abidjan-Bassam), cinemas, hotels (Hotel Ivoire refurbishment). Big progress was also made to start work on the new Heineken brewery, the port extension, the railway upgrade, the Movenpick hotel for Plateau, and the Abidjan metro.

And the big one that didn’t happen…

Perhaps the most significant development was the one that didn’t happen. This was the year in which almost every expert predicted Ivory Coast would see cases of Ebola, and somehow it didn’t.

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BRVM update 2015

As is the tradition (though one that’s about to end) the end of the year at Drogba’s Country is the moment for an update on the West African Stock Exchange (BRVM), based in Abidjan. As a recap, I started investing in 2011, and since then have seen what I consider to be quite decent growth – 17.8% (in the first 8 months) and then annual growth of 27.2%, 31.4%, and 18.6% respectively. I wanted to use this blog to highlight the little known exchange, and chart my progress (funds managed by the bank that makes investment decisions that I have no influence over). The BRVM is in the West African Monetary zone, and so uses the Euro-pegged CFA, meaning that investments don’t suffer from the inflation seen elsewhere on the continent, even if they have fallen slightly with the Euro over the past few years, relative to the dollar and Sterling.

For various uninteresting reasons, I’ve already closed my books on 2015 and start things for 2016. This year has seen growth of…44.1% – definitely the best yet. Indeed according to a recent article (in French), the BRVM has been classed as having the highest returns in Africa. As I’ve explained before, the Abidjan-based stock exchange doesn’t seem particularly logical – it hardly dropped during the Ivorian crisis of 2010-11, and in the aftermath of October’s elections (which to investors relief went peacefully) the situation has been stable albeit with a slight decline in positions. So I have no visibility on 2016.

I recently met an anthropologist who had spent several years studying the stock market boom in Vietnam – something that prompted a huge rush to invest with people taking out mortgages to finance further investment, only for it all to crash with declines of 40% in a few months. Of course such events are not infrequent in emerging economies (and of course elsewhere), and these investments have their risks. Past growth no guarantee of future returns, and all that. Nevertheless, there’s no sense of a boom around the stock exchange in Abidjan, which has not entered the popular imagination despite the growth I’ve detailed above. My hope is that the current good run will continue for at least another few years. When things turn sour, I’ll re-evaluate things, and I’ve already started diversifying into other areas.

This will be the last of these regular posts on this subject: I think the point has been made. But if it all crashes around my feet, I will tell you all about it. As I’ve said before, this particular investment seems a good way to participate in the West African growth story, while also (particularly for the diaspora) offering a better return on investment than the typical mix of badly run and high-risk schemes like rubber planting, taxis and boutiques.

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A quiet spell

It might have escaped your notice, but I haven’t blogged here for a while. Since setting up Drogba’s Country in 2011, I’ve been pretty consistent in blogging about Ivory Coast despite having left the country at the end of 2012. Nevertheless, I face two particular challenges:

  • This blog is focused on Ivory Coast, and I want to give you information that you can’t find elsewhere. My dream would be to tell you about Ivorian society in all its forms – something that is obviously difficult now I’m overseas, even if I continue to follow the country on a daily basis.
  • Secondly, and as my silence throughout the electoral period signifies, my new job means that I have to be careful about venturing into controversial areas, which means that I probably need to stay clear of saying much that’s interesting about politics.

However, I promise to continue writing here, and I hope you’ll find it worth following. There’s still very little out there in English on Ivory Coast so I think there’s a niche. The ultimate goal is to move back to Abidjan in the future and then fill these pages with rich anecdotes and information from this long-time Ivoriophile. If you can wait that long and blogs still exist, it should be worth it. In the meantime, I’ll keep writing here occasionally when inspiration comes, and life as a new-father allows. I hope you’ll continue to pass by regularly. Thank you for reading.

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A booming Ivory Coast

Exactly a month ahead of presidential elections on Friday, Reuters published a glowing tribute to the Ivory Coast boom. On the same day they also published a story on the start of work on a brand new Heineken beer factory in Abidjan, and published new IMF growth estimates that predict 8.4% growth this year and next with minimal inflation. If Ouattara needed a boost ahead of the poll, the barrage of articles will further enhance his reputation for economic management. His press team must have been doing cartwheels.

Reuters aren’t always gushing, notably with their recent detailed reporting on the continuing powerful influence of former rebel warlords. But it did underline that the last four years have seen a remarkable comeback. Given that the reforms are likely to continue, and that the elections will almost certainly run smoothly, I think we can expect Ivory Coast to increasingly become a poster child for the African growth story.

What the Reuters article didn’t speak about much, was the reasons for the growth. Fortunately the story has nothing to do with oil, which while promised as a major growth area for the Ouattara government has failed to splutter to life. The business climate has improved a lot, but the agricultural sector has been the real star – with never before seen cocoa production levels, at a time of high world prices, and all with reforms that guarantee farmers a greater percentage of the world price. The cotton and cashew sectors have also hit record production.

That leads me to two immediate questions. Firstly, why don’t other countries in the region have the same agricultural productivity? Some countries get lucky with oil or minerals, but I’m not aware that there’s anything special about Ivorian soil. What is it about Ivory Coast that has made it an agricultural powerhouse on the continent?

Secondly, we all know the first Ivorian economic miracle under Felix Houphouet-Boigny saw two incredible decades which were then quickly lost as the cocoa price collapsed. Cocoa production is likely to fall next year, but can the ‘boom times’ survive a low world cocoa price? Diversification has and will help. But I think the verdict is still out. You can’t assume cocoa revenues (through production and price) will stay as positive in coming years. Is the growth robust enough? Especially with headwinds from China.

I recognize that for all the ‘boom time’ stories in the international media, most Ivorians struggle to get by, and don’t feel particularly prosperous. One hopes though that if things can continue, most will at least feel the decade has been good to them come 2020.


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Abidjan’s ‘Club Croissances’ calls it a day

Let me tell you a story that goes back to the early days of blogging in Cote d’Ivoire. One of the pioneer blogs focused on business stories linked to the West African Stock Exchange or BRVM. The blog was the initiative of a Congolese medical doctor then based in Abidjan. The website eventually became Okibourse.com (no longer functional) which included one of the first examples in the country of an e-book (a guide on investing in the stock exchange).

From the blog came the project ‘Club Croissances’, an investment club formed on 18 April 2009 which brought together 20 people (including two women). They signed up for ‘shares’ in the Club and as joint-owners discussed investment decisions at regular meetings. The blog itself gave updates on how the Club was doing. As a regular reader of the blog, I noticed growth in the early days was pretty spectacular.

Although membership was fixed at a ceiling of 20, the statues gave provision for additional ‘partners’ of which (to my knowledge) there were only ever two. One left almost as quickly as they joined, and the other was me. The minimum investment for a partner was 100 club ‘shares’ which had then risen to 11,500 cfa ($20) each (November 2010), plus a joining fee (I think around 50,000 cfa ($100)). Along the way some members dropped out and I was quickly admitted as a full member, allowing me to take part in discussions. A key reason for joining was to be part of what seemed like an interesting group of people and hearing other people’s views on how different companies were doing.

The Club was due to run until 2019 but things have been largely moribund for the past few years. In the last month, the decision has been taken to disband the club. Along the way, some members had already sold up, and so we’re 13 members at the end of the day. Unfortunately for me, I joined just as the Ivorian election crisis got going – a rather inauspicious time to invest in anything in Abidjan. But incredibly, the crisis had very little impact on the stock exchange (although the exchange closed for a period), although it did push the club founder to head back to Congo, and with him much of the vitality left. We tried to meet a few times, but things never properly restarted.

Financially though, the club has done well. My initial investment now leads to a payout this month of 4,722,000 cfa ($8,000), or a fourfold increase in just under five years. The portfolio of shares basically didn’t change since I joined due to inactivity. And as the newest member, I’ve gained the least. The average investment growth for club members since 2009 is 461%.

I wanted to share this experience to pick out some lessons. Firstly, even though you need to be really careful about investment projects in this low trust environment, there are good people out there, and there are gains to be made. Secondly, even with a small amount of funds, it’s possible for Ivorians to club together and invest in the stock exchange. Thirdly, the Club opened the doors to my own separate investment in the BRVM which although not growing as fast, has also done well. Fourthly, it shows the value of blogging – the Club and Okibourse.com was a blog that opened eyes to investment opportunities in Abidjan, and was a great example of the communication channels opening up outside traditional media.

For the Club itself, a few of us are starting out on another similar adventure, this time with more dynamism. I’m putting back in everything I earned with the first Club. Who knows, eventually my initial $2,000 investment might come to enough to buy a place to live.

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Promoting investment

On a flight back to West Africa yesterday I picked up a free copy of ‘The Africa Report’ magazine, and was interested to read a two page advert taken out by the Centre for Promoting Investments in Cote d’Ivoire(CEPICI). These sorts of adverts are very common in magazines like AR and Jeune Afrique, with even some of the most tinpot countries promoting the dazzling investment opportunities available in their country with pictures of bridges, dams and ports. In general, I would have liked to see more precise fact-based promotion rather than rather vague comments like ‘Cote d’Ivoire has competitive ports’ or ‘Cote d’Ivoire, the world’s leading cocoa bean producer, processes some of its output’.

What did catch my eye though was the following comment: “In the food industry, the goal is to process 65% of cocoa (35% today) and 100% of cashew nuts (14% today) by 2016.” Regular readers will know I like to keep track of these targets, which seem to always promise something just over the horizon (but fortunately almost no-one notices when the horizons get pushed back). This is the first time I’ve seen the 65% target – until very recently the target has focused on ‘half the crop’. I also don’t think you need to know anything about Cote d’Ivoire to know that for a country to go from processing 35% of a 1.5 million ton crop to 65% in the space of 12 months, or for the world’s second biggest cashew nut exporter to go from 14% processing to 100% in 12 months requires a massive leap forward.

As far as I can see there’s no such policy/investment in place for a giant leap. If the figures change by more than 5% percentage points in the next 12 months I’ll be surprised. For regular Cote d’Ivoire watchers, it looks like the advertisement is playing a bit fast and loose with what’s realistic. I suppose for most though, it will just look impressive.

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Are Ivorians racist?

A reader of this blog asks ‘People say Ivorians do not welcome strangers. Is this true?’ More bluntly, a taxi driver in Freetown recently asked me: ‘Is it true that Ivorians are racist?’ The question is surprising when you consider that the first two lines of the national anthem (‘L’Abidjanaise‘) are:

Salut Ô terre d’espérance!
Pays de l’hospitalité.

Officially then, Cote d’Ivoire is the ‘land of hospitality’. When Didier Drogba, Yaya Toure and other footballers sing the national anthem, that’s what they are saying.

Why would anyone think otherwise? Well, countries only tend to hit the headlines when bad things happen, and the Ivorian crisis certainly gave the country a high profile in the first decade of the 21st century. The crisis was marked by a strong focus on ‘identity’, including whether Alassane Ouattara was Ivorian enough, and whether the country as a whole was under threat from foreigners (mainly migrants from the Sahel, but in November 2004 also the French).

That side of the political spectrum was exploiting a useful device that made sense to many people in the context of the economic decline since 1980, and in particular the shortage of land in rural areas, where ethnic groups from elsewhere in the country, and from elsewhere in the region, had been encouraged to take-over the land, under the motto that ‘the land belongs to the one who cultivates it’. More widely in the 1960s and 70s, nationalism was less demarcated and the country had a reputation as being open to the brightest and best from around the region, often coming from countries with limited opportunities, conflict, and/or poor leadership.

I won’t go any deeper into Ivorian history beyond that broad-brush sketch, but it helps make a few very general points:

  • The 1998 census and the recent 2014 census show that the number of non-Ivorians in the population is around a quarter, many of whom have lived in the country for several generations, and seem to be happy to do so
  • Economic growth is stronger than it was, reducing the societal tension at the bottom that can provide a bedrock for anti-immigrant protests
  • The political side that had more of a tendency in some quarters towards anti-immigrant discourse is no longer in power
  • The Ivorian legal code is far more liberal than many of its neighbours and non-Ivorians are free to own urban property, buy houses etc. Nevertheless under the 1998 land act, rural land cannot be owned though it can be rented
  • Nationals from poorer African nations often occupy a lower class in Ivorian society. My wife grew up in a family with a servant from Ghana. In rural areas, a farm hand is frequently a job  synonymous with nationals of Burkina Faso and Mali.

Would some Ivorians consider themselves a cut above other West Africans? You’ll find some, and that’s probably also true in most countries. I’ve heard people say it’s less true for Cote d’Ivoire than it was pre-1999.

Overall, I’d want to say that Ivorians are generally extremely welcoming people, and beyond the rhetoric, I think there’s a strong element of truth in the country being a land of hospitality. As I’ve written here previously, when I speak to people who’ve spent time working in Cote d’Ivoire, it’s common to hear them say that the best thing about the country was the people.

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Les malentendus

One of the key words that bring a wry smile for followers of Ivorian politics is ‘malentendu’. The fiercest political disagreement or falling out of yesterday is today simply excused as being all down to a mere ‘misunderstanding’. The word crops up frequently, perhaps not surprising in a country that after Houphouet-Boigny saw Gbagbo allied with Ouattara against Bedie (1995), and then Gbagbo allied with Guei against Ouattara (2000), and then finally Ouattara allied with Bedie against Gbagbo (2010). It’s fair to say that there are a number of political characters characterized by two local sayings: that one should ‘dry your clothes where the sun shines’, or that ‘birds don’t stay in the tree when it falls’.

I was prompted in these thoughts by reading a review of a new book on ‘Ivoirite’. Apparently, Ivoirite was all a ‘malentendu’ and that the intellectuals in the 1990s were only thinking pure helpful thoughts without any exclusionary intent.

I wonder if malentendus can survive the internet age – it’s fair to say that the assumption of ‘la memoire courte’ (short-term memory) is more difficult where you can access the political pronouncements of yesteryear on YouTube, and newspaper articles can be searched and read far beyond the old lifespan of the daily paper. I tend to think the Ivorian public is more intelligent than their politicians sometimes give them credit for. But you can be sure that if Gbagbo and Ouattara ever smoke the peace pipe, the past events will be described as a malentendu. It’s a useful tool to sidestep any discussion of someone being to blame for something. Everyone was innocent.

The idea makes one rather cynical, and hints that perhaps it was really just a political game, and that alliances and positions change to suit the times. No-one is apparently guilty of making a mistake, or needing to ask for pardon. It was all down to a simple misunderstanding.

When you see fierce political debates today – those for and against the ‘Appel de Daoukro’, those on both sides of the FPI divide – tell yourself that in future years these will simply be described as a malentendu.

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