Interview: Mukhisa Kituyi
How can Côte d’Ivoire develop its services sector in spite of the Covid-19 pandemic?
MUKHISA KITUYI: Like many African countries, Côte d’Ivoire relies on the export of travel and transport services. Exports in these segments grew significantly between 2005 and 2017, to account for almost 66% of the country’s services exports. However, the travel and transport sectors are among the most affected by the Covid-19 pandemic. It will be important for Côte d’Ivoire to adopt a forward-looking strategy and leverage its advantages. For instance, the Autonomous Port of Abidjan and the Autonomous Port of San Pedro provide a transit corridor for landlocked neighbours Burkina Faso and Mali. Côte d’Ivoire is a key supplier in West Africa’s regional electricity market, and part of an electricity network with Benin, Burkina Faso, Ghana and Togo, among others. Such advantages should inform the creation of a larger national development strategy, and the government’s fiscal response to the pandemic should prioritise service sector growth in order to better recover.
Can you elaborate on the interplay between investment in infrastructure and economic growth?
KITUYI: Investment in infrastructure supports the development of domestic services and facilitates services exports to African countries. Notwithstanding negative economic impacts from Covid-19, the government’s track record shows that it is committed to debt management. The IMF indicated only a moderate risk of debt distress between 2017 and 2019.
Widening fiscal deficits in response to Covid-19 should not come at the expense of capital expenditure on infrastructure. For example, in a country like Côte d’Ivoire, new schools and basic facilities for education are still essential. Investment in technical and vocational training would be a boon to youth, helping them to develop the skills needed to enter the agriculture market and produce cocoa-based goods, and to enter the modern services industry, specifically the financial services, distribution and logistics, and ICT sectors, which remain viable paths for growth in the long term.
What will bring services, infrastructure and economic growth together over the long term is the African Continental Free Trade Agreement (AfCFTA). Côte d’Ivoire, along with Ethiopia, has been one of Africa’s fastest-growing economies and must help lead Africa’s recovery from the Covid-19 pandemic. The AfCFTA agreement will remain an open door to boosting trade with regional partners. Especially in difficult times, political leaders, government experts and the private sector must work together on a shared vision for longterm development, generating new opportunities and improving living standards for all.
What needs to be done to make agriculture more profitable in Côte d’Ivoire?
KITUYI: Côte d’Ivoire produces three key commodities: cocoa, coffee and palm oil. The country can leverage its position as the world’s largest cocoa producer to make agriculture more profitable for its farmers. Looking at the current set-up of the cocoa value chain we can see that a consumer spending £1.00 on a milk chocolate bar in the UK yields only £0.04 for the cocoa producer, which is unprofitable for Ivorian producers. The government’s recent move to make multinationals sourcing cocoa beans from Côte d’Ivoire pay more is potentially a good idea. A minimum price on cocoa would help reduce poverty, but it would require multinationals signing export contracts to adjust to the risks of fluctuating commodity prices, which requires careful planning.
Being in a dominant position could benefit the national economy. Rather than just exporting cocoa beans, developing capacity to produce cocoa butter and cocoa liquor for export would create employment opportunities for Ivorians and boost the local economy. Côte d’Ivoire and Ghana, the world’s second-largest cocoa producer, have taken steps towards this longerterm goal by starting to coordinate cocoa policy.
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