Understanding the Abidjan economy

I’d like to think that with each year that goes by in Abidjan I get closer to understanding how things work. There are some things though that get more difficult to understand the deeper you dig. Anyone who has bought a second hand car in Abidjan knows they can cost about 3-4 times the value on the European market. Anyone who’s bought a house in Abidjan knows that housing costs aren’t that much cheaper than in Europe, certainly if you consider quality. And yet, many people in the large middle class area of Cocody, as elsewhere, own homes that are worth a lot of money, and the roads are filled with large expensive saloon cars and 4×4, the minority of which belong to the UN and humanitarian sector.

So where does the money come from? There is much that lacks transparency. I don’t have data on earnings, but I would think that the number of people who earn more than 1 million CFA a month ($2,000) would be extremely rare. GDP per capita is $1,680 a year (2010). The salary of a Member of Parliament is only 1.4 million cfa a month. From memory, a government minister earns about 4-5 million cfa. The private sector may have higher salaries, I’m not sure. But I still think that there can’t be many people who are officially earning more than 1 million.

So why do you often see finer cars than you see in Paris, clubs where champagne is drunk like orange juice and vast mansions in Cocody? Especially when you consider that it’s almost impossible to get a mortgage or simple credit. Even for some of my friends, I have no idea how they earn their money – it’s certainly not from their principal public activity. In Europe, things seem to be more straight-forward – most people have a single full-time job, which represents 99% of their income.

So what’s the answer? Some of it must be corruption and some of it informal earnings, I would guess principally from rental income and agriculture. The figures for natural rubber farming (popular with the urban middle class) and teak forests make them look like incredibly good earners. But of course it’s all so non-transparent and it’s still difficult to know how people are as rich as they apparently are.

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2 Responses to Understanding the Abidjan economy

  1. Martin says:

    Very interesting questions.

    I think:

    -Out of Abidjan’s 4 million people, only a very small part live in large villas in Cocody. Since there are less cars and less roads than in a developed-world city with 4m people, and the middle class with average sized cars and houses is tiny, the luxury cars and houses become more striking and visible.

    -The people who do live in large Cocody villas have gotten their wealth from being a) corrupt high-level public officials and politicians, b) successful private sector businessmen/ high level private sector employees c) high level employees for humanitarian organisations or foreign diplomatic missions.

    -Of these groups only the third and likely the smallest group get their wealth primarily from a salary. As for group b), I guess their wealth comes from all economic sectors in the Ivory Coast, possibly with an under-representation of agriculture as that’s done relatively more in the rest of the country.

    -Nobody knows what the GDP per capita of the Ivory Coast is. The informal sector is impossible to measure with precision. I have only seen final GDP figures, but I’d like to see a discussion of assumptions and estimates made. It could be that all the published GDP figures underestimate the informal sector.

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