Côte d'Ivoire Economic Outlook
Real GDP growth reached an estimated 7.4% in 2018, down from 7.7% in 2017, supported by external demand for agricultural and oil products and stronger domestic demand resulting from major investment projects and households consumption. The economy faced several shocks in 2017, including a sharp decline in cocoa prices, higher oil prices, and social tensions. As a result, the budget deficit increased to 4.2% of GDP, but it improved to an estimated 3.8% in 2018. Public debt increased to 48.2% of GDP in 2018, driven by Eurobond issuances in 2017 and 2018. The risk of debt distress remains moderate. Inflation was low, at an estimated 0.5% in 2018, down from 1.0% in 2017. The current account deficit widened to an estimated 2.7% of GDP in 2018 from 1.8% in 2017.
The economic outlook remains favorable, with real GDP growth projected at 7.0% in 2019 and 6.9% in 2020. A good performance in the agricultural sector will keep inflation below the 3% convergence threshold for the West African Economic and Monetary Union (WAEMU). The current account deficit is projected to stabilize at 2.8% in 2019, in connection with sustained imports of capital goods related to infrastructure projects.
The economy remains vulnerable to external shocks that may stem from unfavorable evolution of commodity prices (mainly cocoa and oil) and adverse climate conditions. Another pressing challenge is to sustain economic growth and ensure a more balanced distribution across sectors, with a view to achieving a structural transformation of the economy. This would require improving the quality of agricultural products and upgrading the industrial sector toward higher value added and high–job creation activities.
Tailwinds and headwinds
Côte d’Ivoire has implemented many reforms as part of its 2016–2020 National Development Plan. In energy, reforms have focused on ensuring the sector’s financial sustainability, clearing arrears for independent producers, and investing in supply capacity. As a result, installed capacity increased by 56% between 2011 and 2018 to 2,200 MW. Rural electricity coverage has also expanded from 33% of the rural population to 54%. In agriculture, reforms have focused on accelerating the development of value chains and increasing local processing for major agricultural products, including cocoa, cashew nuts, palm oil, and rubber. Investment has also improved the quality of and access to basic education and health services. But poverty and inequality reduction remain a challenge.
Côte d’Ivoire is party to most of the relevant continental institutions dedicated to regional integration. The country has historically been an important destination for immigration and remains at the center of one of the continent’s most dynamic migration routes. Côte d’Ivoire is also an important transit corridor for its landlocked neighbors, thanks to its ports in Abidjan and San Pedro. It is a key partner in the regional electricity market and is part of an electricity interconnection network with Benin, Burkina Faso, Ghana, Togo, and soon Mali, as well as to the Mano River Union countries (Guinea, Liberia, and Sierra Leone). Côte d’Ivoire is the major player in WAEMU’s financial markets and hosts the regional securities exchange. Côte d’Ivoire has also increased investment in regional energy, road, and air infrastructure and telecommunication networks.