Since the end of the political and military crisis in 2011, inward foreign direct investment (FDI) to Côte d’Ivoire has progressed continually, doubling from $302m in 2011 to $675m in 2017, and reaching $607m in the first half of 2018 alone. Strong economic performance and the government’s focus on rebuilding infrastructure have driven Côte d’Ivoire’s stock of FDI to $9.5bn at end-2017.
Côte d’Ivoire has been one of Africa’s fastest-growing economies in recent years. Benefitting from a catch-up effect following a decade-long conflict, GDP grew by an annual average of 8.8% from 2012 to 2016. Since then growth has gradually been slowing, but it remains strong, reaching 7.7% in 2017 and forecast at 7.4% in 2018. A return to social stability, supportive public investment and opportunities resulting from reconstruction projects have attracted many investors. According to the World Bank, the value of private investment surged from 5.7% of GDP in 2011 to 12% in 2017.
The government has also been implementing measures to draw investor interest. In 2012 it introduced a new Investment Code providing incentives and tax exemptions. The code was revised in 2018, but has yet to come into effect. It also set up a single window system, allowing a business to be set up in 24 hours, and established the Chamber of Commerce and Industry Côte d’Ivoire and other government bodies tasked with improving governance and the business environment. It is expected that the private sector will contribute up to 62% of the CFA30trn (€45bn) National Development Plan 2016-20.
In 2017 FDI fell by 11% to $11.3bn in West Africa and by 21% to $41bn in Africa as a whole, largely because of weak oil and commodity prices. In contrast to these broader trends, Côte d’Ivoire’s FDI stock rose by 17%. The extractive industry received 39.2% of FDI, followed by the financial sector with 27.8% and telecommunications with 13.6%, reflecting the ongoing diversification of the Ivorian economy. Côte d’Ivoire is seeking to develop its mining, oil and gas sectors, which have long been neglected in favour of agriculture.
Among the most notable partnerships with foreign firms, Netherlands’ Heineken invested $35m to build a brewery near the commercial capital Abidjan, competing with France’s Castel, which had a near monopoly on the sector to date. The Coffee and Cocoa Council is also is looking for international investors for two new processing plants in Abidjan and San Pedro with capacities of 100,000 tonnes and 50,000 tonnes, respectively, set to open by the end of 2020. The origins of investment are also increasingly diversified, with France’s share gradually declining, and interest from other countries – including Morocco, Turkey, China and India – continues to grow.
Although foreign investment has increased, net inward FDI as a percentage of GDP has remained at about the same level in recent years at a modest 1.5-2%, far from rates recorded in other African countries like Ethiopia and Mozambique. In 2017 Côte d’Ivoire attracted the third-highest level of FDI in West Africa, but with less than $700m it remained some way behind Ghana ($3.26bn) and Nigeria ($3.5bn). According to EY, Côte d’Ivoire attracted 23 FDI projects in 2017, compared with 96 for South Africa, 64 in Nigeria and 43 in Ghana.
The business climate has picked up significantly in recent years, but a lot remains to be done to substantially improve governance in the local business environment and attract investors. With public investment set to weaken as the authorities look to meet their fiscal deficit target, greater involvement from the private sector will be required to maintain growth and a more equitable distribution of economic benefits. As a result of government reforms, the IMF estimates that the country’s inflows of FDI will expand to $862m in 2020 and $1.29bn in 2023.