Here’s the second in my new weekly economic round-ups.
– Few doubts about the major economic story of the week – Ivory Coast became the 33rd country to achieve the IMF/World Bank’s HIPC achievement point which means a huge swathe of external debt has been cancelled ($3.87 billion). That was followed by the Paris club cancelling 99.5% of debt ($6.497 billion). External debt at the end of 2011 was $12.49 billion. Work towards getting debt relief began in 1983, so it’s been a long process. There may not be a huge reduction (if any) in debt costs, because of the country now losing its ‘special status’ and gaining normal financial relations with the rest of the world. But the move is undoubtedly a triumph for the Ouattara government, though everyone knows the key thing is for ordinary Ivorians to start ‘feeling it’.
– Not sure if it was related to the debt relief, but the cabinet meeting this week announced a deal with China’s Eximbank worth $244 million for two major projects (in the same area) – building a dual-carriageway from the edge of Abidjan to Bassam (about 15km) and also to build water infrastructure to provide Abidjan with water from the other side of Bassam (the town of Bonoua). The highway should be good news for Bassam, which yesterday made it on the UNESCO world heritage list – it’ll also provide an Ivorian section of the Abidjan-Lagos corridor project. The Abidjan Bassam road is also part of the wider Greater Abidjan ring road plan. It’s good to hear of new projects like this being announced as since 2011 there’s not been much new. Hopefully the debt relief should kick off another wave of developments.
– at the same time, and again possibly linked to HIPC, the Ivorian government completed the financial agreement for Abidjan’s third bridge. While it’s good to see this completed, many people can’t help feeling a bit miffed given that the project got underway with a ceremony in September 2011 when we were the promised the bridge would be complete in 27 months. Now apparently it will be complete in the final quarter of 2014, which is 27 months from now, which means they don’t consider that they’ve done anything up to this point. Actually, there has been a reasonable amount of work at the site, though building experts had been wondering for a while now about why they didn’t seem to be putting much effort in. I guess it all makes me a bit more wary about the marketing power of the Ouattara regime, which uses the best communications team in Ivorian politics to tell us everything is moving full-steam ahead.
– the other news I wanted to pick out this week, was a look at the natural rubber trade. Ivory Coast’s biggest private company, SAPH, makes the largest part of its money with natural rubber, which has also become something of a boom crop in recent years particularly thanks to speculative planting by the urban elite. Ivory Coast is Africa’s top grower with production set to continue growing rapidly as the trend continues and trees in the 0-7 age range start entering into production. Prices are down from the record highs seen last year, tyre-makers are reporting many people are waiting before buying new cars (and tyres) and the world’s biggest consumer of rubber, China, is expecting its worst growth figure since 1990.