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.