Côte d’Ivoire recognises the importance of transport and logistics for economic growth

 

Since the return of political stability to Côte d’Ivoire in 2011, the country has gone through extensive public infrastructure works with a notable focus on transportation. In fact, the transport sector accounted for 9% of Côte d’Ivoire’s GDP in 2018, according to the Ministry of Transport.

Nevertheless, a number of challenges remain, particularly related to developing and maintaining an integrated logistics network. Recognising the key role such a system would play in encouraging competitiveness, the authorities and private investors alike are seeking to address such issues via the programmes outlined in the National Development Plan (Plan National de Développement, PND) 2016-20, as well as through various public-private partnerships. Nearly one-quarter of the required budget for the PND – which is to come from a mix of public sector funding and private investment – is being devoted to roads and the wider transport sector, equivalent to just over CFA7.1trn (€10.7bn) of the plan’s total budget of CFA30trn (€45bn).

Road Projects

Côte d’Ivoire comprises 86,400 km of roads, including 244 km of motorways, 6453 km of inter-urban roads and 4314 km of urban roads. The country’s previous PND, which covered the 2012-15 period, saw a number of works completed, including the construction of a motorway between the country’s capital Yamoussoukro and Singrobo, located some 98 km to the south, as well as three bridges in the country’s economic capital of Abidjan on the southern coast.

Adding to this, construction on the 7.5-km, CFA30bn (€45m) Azito bridge between Yopougon and Ile Boulay has been resumed. Started in 2008, the project stagnated primarily because of changes to its design before and after the political crisis of 2011. Similarly, work is ongoing on the 1.4-km, CFA130bn (€195m) bridge connecting Yopougon to the Plateau district. The bridge, which is to carry some 70,000 vehicles per day, is due by 2020. Further road construction is also planned to extend the sealed road network to 12,000 km by 2025.

Logistical Synergy

In addition to new projects, the country is also in need of road maintenance and rehabilitation. Road infrastructure is a key issue regarding the overall logistics network, leading to congestion at Ivorian ports, as well as generally poor conditions for road freight. According to Augustin Kacou, an official at the state’s Road Management Agency, the country’s road network was extensively damaged during the political crisis and has not been well maintained since, leading to significant disrepair. Indeed, a study conducted in 2013 with the National Bureau for Technical Studies and Development and key Ivorian engineering groups showed that 50% of the road network in Abidjan was in need of maintenance. This was caused primarily by the low quality of initial construction, a shortage of government funding, as well as bad driving habits and behaviour, particularly by overloaded cargo trucks and vehicles that degrade road conditions.

In April 2017 the government began to apply Rule 14 of the UEMOA, which mandates the enforcement of vehicle weight limits with the use of weigh stations. However, under external pressure from other states in the region, Côte d’Ivoire suspended the rule shortly afterwards. The authorities are planning to apply the rule again, with weigh stations being built in order to facilitate its enforcement. All new and renovated roads are to feature at least one station from 2018 onwards. Industry figures say regional coordination regarding the issue is vital to other transport modes as well.

2016-20 PND

As part of the most recent PND, Côte d’Ivoire plans to invest CFA121.4bn (€182.1m) for road maintenance and CFA899.6bn (€1.3bn) for the rehabilitation of existing roads, thereby covering 4500 km in total. “A national programme to rehabilitate roads on an annual basis was started in 2012, with 2018 seeing more than 40% of the network covered,” Kacou told OBG. In terms of road development more specifically, the government also devised the National Road Development Programme 2016-25, unveiled in August 2016 with a budget of CFA3.8trn (€5.7bn). “Major projects include the extension of the Northern Highway, the Abidjan-San Pedro Highway and the Yamoussoukro-Tiébissou-Burkina Faso Highway,” Kacou said.

Works also include the rehabilitation and expansion of the 13.4-km Boulevard de Marseille in Abidjan that began in 2017. The project aims to improve the quality of the road itself and boost its connectivity to other major arteries of the city such as the Boulevard Valéry Giscard d’Estaing in the south of Abidjan. Similarly, a programme to upgrade the 170-km paved road linking the PK 109 from the Northern Highway to Gagnoa via Divo and Lakota is also taking place. Started in September 2017, construction time has been estimated at 36 months undertaken by Ivorian public works firm PFO Africa.

Road Funding

The amount of public funding will also need to be increased. “A lot more state financing is needed given the amount of work to be done,” Eugène N’Gouan, chief engineer at civil engineering company Colas Group, told OBG. “For now, these projects are primarily paid for by international finance institutions such as the World Bank and the African Development Bank (AfDB).”

Beyond aid and loans, the government is using a special Road Maintenance Fund (Fond d’Entretien Routier, FER) to finance the projects. The FER was implemented to ensure the processing of on-time payments for the small and medium-sized enterprises (SMEs) and large firms involved in the works. Local companies, such as La Route Africaine and international firms like Tunisia’s Soroubat Group, Morocco’s Sintram and Chinese firms, including the China State Construction Engineering Corporation, among others, are key players in the market.

“The solutions provided by construction firms as part of the renovation of roads must correspond to the means of the country,” Keita Alhi, director-general at local firm Moving Road, told OBG. “Bitumen, for example, is an expensive material, and its installation requires substantial resources. However, innovative technologies could accelerate the process of connecting cities in Côte d’Ivoire.”

Abidjan International Airport

The primary international air hub in the country is Abidjan International Airport – also referred to as Félix Houphouët-Boigny Airport – located approximately 16 km south-east of the city. The airport has received accolades for its security, and is ranked as one of the safest airports in Africa by the US Transportation Security Administration.

According to the National Civil Aviation Authority (l’Autorité Nationale de l’Aviation Civile, ANAC) in 2017, a total of 22 carriers operated out of the airport with national flag carrier Air Côte d’ Ivoire operating 113 flights per week. Other airlines include French flag carrier Air France with 14 flights, Moroccan flag carrier Royal Air Maroc with eight, Belgian Brussels Airlines and Emirates with seven flights, and Portuguese airline TAP with five flights per week from Lisbon. The airport also welcomed a new Ethiopian Airlines direct flight from Abidjan to the US city of Newark, New Jersey in 2018.

The airport is managed and operated by Aeria, a subsidiary of French company Egis, and will be until 2030, as its concession agreement with the government was renewed in 2010 for 20 years. The concession agreement also calls for Aeria to modernise the airport’s infrastructure with a total investment of CFA80bn (€122m) to bring passenger capacity to 3m people by 2030.

“A key goal is to modernise the airport’s infrastructure and make it adhere to international standards,” Gilles Darriau, CEO of AERIA, told OBG. “That said, beyond Abidjan International Airport, boosting passenger traffic also depends greatly on the country’s economic situation,” he added.

Traffic is growing rapidly at the Abidjan International Airport, reaching more than 2m passengers in 2018, up from 1.8m in 2016 and 647,000 in 2011, with Air Côte d’Ivoire accounting for 40% of this. As tourism infrastructure remains underdeveloped, the traffic is primarily driven by the business segment given the country’s economic growth post-2011. The airport’s maximum capacity of 2m passengers means that investments are being channelled into expansion works in effort to make Côte d’Ivoire an air transport hub for West Africa.

“A strong aviation industry is a way to open the country to services, tourism and investors,” Sinaly Silué, director-general at ANAC, told OBG. “Specifically, facilitating transport to and from Abidjan will prompt economic players to pick Côte d’Ivoire as the headquarter for their regional operations.”

Capacity Expansion 

Indeed, an agreement between Chinese officials and Côte d’Ivoire will see the airport quadruple its capacity from 2m to 8m travellers per year by 2024, with work expected to commence in 2019. Although official plans have yet to be fully clarified and confirmed, the authorities are also planning to construct a large-scale transportation services area, which will include an exhibition centre, high-end hotels and residences, as well as commercial, industrial and logistical facilities.

Of Aeria’s total CFA80bn (€122m) investment, over half, or CFA41.3bn (€62m), was earmarked for 2018-19. The company redeveloped the facility’s taxi lane, notably to allow access for large aircraft such as the Airbus A380, and is currently constructing a 2.7-km taxiway to allow planes to queue before take-off, reducing waiting time during busy periods. Additionally, Aeria is building 11 new aircraft parking stands to handle large planes – including the Boeing 787 Dreamliner – to be completed in 2019 by French firm Spie Batignolles. In terms of terminal upgrades, in 2018 Aeria extended its international terminal for CFA650m (€975,000) to accommodate up to 2.5m passengers, in line with growth projections. Lastly, the company rebuilt and enlarged its parking facilities, increasing capacity from 600 cars to 900, helping solve the problem with congestion.

A business aviation centre for private jets is also in the pipeline for 2019, while other longer-term plans include the construction of a new international passenger terminal. The business aviation centre will be managed by Dubai-based flight support company Jetex. The segment is seen as one with important potential in Côte d’Ivoire, as private jet traffic grew from 500 vessels per year in 2014 to 600 in 2018.

Air Cargo

To boost the country’s freight competitiveness, a new cargo terminal was built at the Abidjan International Airport in 2017 for an estimated total cost of CFA21.4bn (€32.1m). The project was financed primarily by the Islamic Development Bank, the Organisation of the Petroleum Exporting Countries and the government of Côte d’Ivoire. The new terminal will increase annual freight-handling capacity from 25,000 tonnes to 50,000 tonnes, and allow for an annual cargo movement of 23,400 tonnes in 2017 and an estimated 26,327 in 2018, according to data provided by Aeria.

Despite such efforts, however, the high costs of freight fees will continue to impact the airport’s cargo performance. Similarly, burdensome procedures to evacuate merchandise efficiently will be necessary to attract more aerial freight. Additionally, taxation in the sector, including a 15% levy on spare parts and aircraft value, is a constraint to the development of the segment, with more competitive terminals in the ECOWAS region able to attract operators by providing lower costs.

National Carrier

Launched in 2012, Air Côte d’Ivoire has become an important regional airline using Abidjan as its home base. The airline services 23 destinations in West and Central Africa, comprising 54% of the market in these two subregions. Passenger numbers have grown steadily, from 253,000 people in 2013, its first full year of operations, to 850,000 in 2017. That year the company purchased five new Airbus A320s with the help of a €98m loan from the AfDB. Adding to its fleet are two Airbus A320s, owned by the firm, and a number of leased Airbus A319s and Bombardier Dash 8s. The company plans to add 10 more aircraft by 2021.

The government owns a 65% stake in the airline, with Air France and private local investor group Goldenrod holding the remaining 20% and 15%, respectively. Medium-term plans see the government continuing to promote the airline with a CFA10bn (€15m) allocation under the PND 2016-20, before eventually selling off its shares to the private sector. Air Côte d’Ivoire has generated revenues of CFA326.2bn (€497.3m) since its inception, benefitting from the country’s economic growth, although the company has yet to turn a profit, incurring cumulative losses of CFA65.5bn (€98.3m). This is partially due to the increase in fuel prices during its initial years of operation.

Other Airports

Côte d’Ivoire also has six more airports, including the international Bouaké Airport in the country’s second-largest city, and five facilities serving domestic flights. San Pedro Airport will undergo a CFA45bn (€67.5m) upgrade to service international flights. The project is planned primarily to provide better logistics connections with the Port of San Pedro, creating an air and maritime freight hub for relevant companies, especially for those operating in the cacao sector. Eventually, global shipments could be handled in San Pedro, rather than having truck goods to Abidjan or Bouaké.

Autonomous Port of Abidjan

The Autonomous Port of Abidjan (Port Autonome d’Abidjan, PAA) is one of the most important facilities in West Africa, serving as an import-export point for neighbouring landlocked countries, second only to the Port of Durban in South Africa. It serves around half of Ivorian industries, and accounts for some 85% of the country’s Customs revenue and over 60% of its total income. Facilities at the PAA include 34 berths along 6 km of quay that can accommodate up to 60 commercial vessels at once.

Total throughput and traffic at the PAA stood at 22.5m tonnes in 2017, up 3.8% from 21.7m tonnes in 2016. Container traffic grew 4.4% in the same year to reach 663,601 tonnes. Port traffic is driven primarily by general merchandise, including exports of cocoa and cashew nuts, and imports of construction materials and petroleum products.

Port Upgrades

Significant infrastructure works are ongoing at the PAA to modernise and expand its capacity. The projects, which will cost $2bn overall and cover the 2018-21 period, include the construction of a second container terminal to boost capacity to 2.8m twenty-foot equivalent units (TEUs). Set for completion in 2020, the $496.3m terminal will be operated by Danish conglomerate Maersk and French companies Bolloré and Bouygues. Another new €90m cereals terminal will also be built at the port, financed by the Japanese International Cooperation Agency. Similarly, Belgian terminal operator SEA-invest has plans to build a mineral terminal, which will primarily handle nickel ore, while multinational logistics group Grimaldi will build the PAA’s first roll-on/roll-off terminal.

To ease congestion, a logistics platform 28 km from Abidjan will also be constructed by Maersk, while the Vridi Canal is being deepened and extended by the China Harbour Engineering Company. Upon completion in August 2019, the canal will be able to accommodate ships weighing over 150,000 tonnes, up from the current capacity of 50,000 tonnes. The 16-metre extension will cost CFA560bn (€840m), and is primarily financed by the Export-Import Bank of China, the Ivorian government and commercial banks.

Beyond infrastructure works, officials at the PAA are working on efficiency gains through administrative simplification, especially at the regional level. In particular, 2018 was marred by setbacks stemming from a quality control regulation on imported products that was imposed for three months before it was suspended. “It is true that we had some issues related to this regulation that caused the process became even slower than usual; however, everything is back to normal now,” Remi Atangana, the commercial and marketing director-general at Bolloré, told OBG. “That said, we have yet to clarify the future of this regulation and whether it will be dropped altogether or revised,” he added.

Further commenting on the need to rethink port operations, Patrick Assi, director-general at Ivorian logistics firm Logis, told OBG, “Port procedures are constraining overall logistics growth. The implementation of a more efficient in-and-out system is crucial in order to streamline operations and increase the sector’s attractiveness”.

Port of San Pedro

The country’s second-most important port is the Autonomous Port of San Pedro (Port Autonome de San Pedro, PASP) located in south-western Côte d’Ivoire close to the Liberian border. It also serves the landlocked neighbouring countries of Burkina Faso and Mali. The PASP is primarily used to export soft commodities such as cocoa and coffee, with traffic standing at 2.9m tonnes in 2017, up 13% on 2.5m tonnes in 2016, according to its general manager Marcel Hilaire Lamizana, on behalf of Mediterranean Shipping Company (MSC), the Swiss-Italian firm that manages the facility’s container terminal.

In 2017 MSC extended its concession agreement with the Ivorian government for an additional 35 years. Terms of the deal included plans to expand the PASP at a cost of CFA300bn (€450m). Of this, CFA122bn (€183m) is financed by MSC and CFA180bn (€270m) by local authorities. The extension will consist of a new mineral terminal and container terminal, and increase annual container capacity from 300,000 TEUs to 1m TEUs. The port will also be able to accommodate ships with a capacity of up to 14,000 TEUs, up from the current 5000 TEUs. The project is expected to be completed by 2020.

However, for the various projects at PASP to yield their full potential, land transport into and out of the city as well as those to neighbouring countries must be improved. Road access between San Pedro and Abidjan is also challenging, with numerous detours along the motorway connecting the two cities. Efforts to address such problems include a planned renovation and paving of sections of the Abidjan-San Pedro Highway, included in the 2016-20 PND, and a grant from the EU to support the development of the Bamako-San Pedro corridor, which is expected to reduce travel times between the PASP and the Malian capital by around 70%.

Dry Port Potential

Côte d’Ivoire will also build a new CFA262bn (€393m) dry port in the northern city of Ferkessédougou, following a deal made between the Ivorian and Chinese governments in September 2018. Expected to come on-line in 2020, the 3185-ha port will be built and financed by Chinese operators, and is expected to link to the PAA and neighbouring landlocked countries. It will comprise an import-export terminal, a hydrocarbons depot, and a regional livestock market and abattoir (see analysis).

Challenges

Despite significant achievements in both air and maritime transport, Côte d’Ivoire remains relatively underdeveloped in the logistics field, primarily because of road freight. “Operated by a handful of SMEs, the sector is fragmented, and suffers from a lack of maintained trucks, low capacity and inadequate pricing,” Frank Fournier, deputy director-general at French shipping company Omenem Holding, told OBG. Beyond transport, the country is lacking in warehousing and logistics facilities, although some actors have intervened in recent years to address this issue. Bolloré has 400,000 sq metres of warehousing capacity at the PAA and PASP, and in early 2018 added a 10,000-sq-metre warehouse in the Abidjan area of the Vridi Canal to its existing 16,000 sq metres of warehousing dedicated exclusively to cocoa exports. The company also plans on investing more than €100m in warehousing in the coming years, primarily focused on cocoa exports, which comprises the bulk of the company’s activity in Côte d’Ivoire. Approximately 51% of the country’s cocoa exports are stored in Bolloré warehousing. Similarly, more private sector investments are coming from SEA-invest, with a new logistics base in Abidjan’s highly populated industrial district of Yopougon. The 20-ha site, which was completed in 2016, can store up to 120,000 tonnes.

Rail

Côte d’Ivoire is home to a large portion of one of the few major railways in West Africa, the 1260-km link between Abidjan and Ouagadougou in Burkina Faso. The line is managed by Sitarail, a subsidiary of Bolloré, under a concession agreement renewed in 2016 with the authorities of the two countries. Although the concession primarily concerns the operations and management of the railways, it now also covers necessary investments and maintenance of the tracks and rolling stock as well as the stations and the yard.

On the back of a number of breakdowns and abrupt halts in operations, Bolloré is planning to rehabilitate 852 km of track and the respective stations for a total cost of CFA2.64bn (€3.96m). The rehabilitation programme began in 2017 and is expected to be completed by 2022 leading to an increase in annual capacity to 5m tonnes of cargo and 2m passengers, up from just under 900,000 tonnes of cargo and 300,000 passengers per year.

Outlook

The transportation sector is a national priority. Several projects are under way in the air and maritime transportation subsectors that are set to secure the country’s position as a regional transit hub. In the maritime sector, these include the extensive expansion and investments in the two major autonomous ports of Abidjan and San Pedro.

As for the air transport segment, these include the continuous development of the national carrier, Air Côte d’Ivoire, through the improvement of its fleet, and higher levels of traffic at Abidjan International Airport through better cargo handling and additional passenger capacity.

Beyond such planned investments, Côte d’Ivoire still needs to address its road freight and logistical issues, which stems primarily from the fragmented nature of the market. Nevertheless, market consolidation and ongoing investment by notable international players is starting to address the issue. This should encourage Côte d’Ivoire’s plans of developing local and regional transport connections.

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The Report: Côte d’Ivoire 2019

Transport chapter from The Report: Côte d’Ivoire 2019

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