Côte d’Ivoire is aiming to increase the contribution of its industrial sector to the national economy from 25% at present to 40% by 2020 as part of a brand new, fouryear industrial programme. Known as the National Enterprise and Restructuring and Upgrading Programme (Programme National de Restructuration et de Mise à Niveau, PNRMN), and launched in March 2014, the initiative has been developed with support from the UN Industrial Development Organisation in part to curb chronic under-investment in Côte d’Ivoire’s industrial sector. This is not limited to solely attracting new investment, but also providing overhauls to ancillary sectors, including both hard and soft infrastructure – such as research and development in which the country has spent less than 0.5% of its national GDP in recent years, compared to an average of 1% to 1.5% for emerging economies and 1.5% to 3.5% for OECD member states.
Policy Turnaround
The policy goes hand-in-hand with broader government reforms. The 2012 Investment Code, for example, exempts investors from value-added tax on the acquisition of machinery and equipment, while a 50% reduction is applied to Customs duties on imports of related supplies and spare parts. In addition, new industrial zones will be created and investors will benefit from special tax treatment for periods between eight and 15 years, depending on the location of the investment. Further, small and medium-sized enterprises will benefit from a reduction on utility costs and accelerated and subsidised land access. The code also incentivises the promotion of social housing and infrastructure development. In return, investors commit to technology transfer, compliance with environmental regulations, job training and job promotion.
Administration
The implementation of single-window registration has also quickened the processing of public procedures such as business registration, land access and export licences. Both the number of bureaucratic steps and their fees have been reduced significantly. As a result, the average number of days required to obtain a building permit has fallen from 475 to 87.
Also, a Commerce Tribunal was established in 2012, dedicated to handling commercial conflicts exceeding CFA1bn (€1.5m) in value, that would have otherwise been handed down to the Court of Appeals. This has increased the number and speed of legal queries. Under the previous regime, these were handled by regular civil courts. According to the Ministry of Industry and Mining (Ministere de l’Industrie et des Mines, MIM), the tribunal has averaged 1200 verdicts per 45 days since its creation in 2012. The measures have led to Côte d’Ivoire moving up in the World Bank’s most recent “Doing Business” report, moving 11 places to 147th for 2015.
The PNRMN has consolidated earlier plans to improve industrial zones, particularly in Abidjan, and, in the process, attracted funding and the attention of private players to set up and manage new industrial zones. The inception of the Agency for the Management and Development of Industrial Infrastructure in May 2013 to oversee the development of existing and new zones, as well as the creation of the state-run National Fund for the Development of Industrial Zones in 2014, has increased financing and new productive facilities.
Plan Specifics
As part of the plan, the government is seeking investments totalling CFA152bn (€228m) into a number of key industrial segments, offering competitive advantage and export potential into the (West) African region. Traditional industries in the agricultural and textile segments, such as rubber, cotton, oil palm, and cocoa, are among the chief beneficiaries, but new industries offering higher added values are being targeted. These include the production and assembly of information technology hardware and consumer goods, such as plastics, generic medication and semi-processed timber for furniture production. According to the MIM, about 17.5% of the total budget is to come from direct investment, while the banking sector has committed to help underwrite more than 60% of it. The remaining share will be taken on by Côte d’Ivoire’s development partners, accounting for 18.5%, leaving the government with a minimal financial participation of 0.6%.
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