Private Sector Key to Recovery and Growth
As the director of Ciment Cuirasse in Abidjan, Mr. Nagolo Soro persevered throughout Côte d’Ivoire’s decade-long political conflict, sometimes running his cement factory under tremendous risks.
“We heard bullets outside the building but kept working until the last hour,” he recalls of the post-electoral crisis in 2010. The period of tension and violence took a tremendous toll on the private sector in Côte d’Ivoire, the world’s leading producer of cocoa and the largest economy in the West African Economic and Monetary Union.
After the political turmoil subsided, the country committed to reforming its business environment by making it a safer and easier place to invest and do business. The government of Côte d’Ivoire worked in close partnership with the World Bank Group to lower regulatory barriers and implement new policies and procedures that promote the private sector, including those that empower women entrepreneurs.
Thanks to these joint efforts, Côte d’Ivoire has earned a place as one of the top reformers in the Doing Business 2014 report. The country’s GDP growth has recovered from -4.7 percent in 2011 to 9.8 percent in 2012 and 8.7 percent in 2013. The government is encouraging further private sector growth with the goal of becoming an emerging market economy by 2020.
A major challenge in meeting that goal is attracting more foreign investment to the country. CEPICI, Côte d’Ivoire’s investment promotion center, organized “Investir en Côte d’Ivoire (ICI) 2014" forum, a three-day investment conference in January, held in Abidjan, the country’s largest city. The high-profile event was attended by nearly 4,000 investors, entrepreneurs, development experts, and public sector officials from over 100 countries, including the Prime Minister, Minister of Economy and Finance of Côte d’Ivoire, Daniel Kablan Duncan, who delivered remarks at the opening ceremony. "Côte d’Ivoire is extending its hand to you for a win-win partnership," Prime Minister Duncan told investors.
Improving Côte d’Ivoire’s Investment Climate
ICI 2014 was a call to the international community to tap into Côte d’Ivoire’s growing investment potential. ICI 2014 showcased opportunities in the country’s key industries and sectors, such as agribusiness, infrastructure, and renewable energy. Supported by IFC, the forum also hosted a start-up competition to help foster young entrepreneurs in Côte d’Ivoire who are engaging in innovative ventures in energy and technology.
ICI 2014 drew attention to Côte d’Ivoire’s improved regulations and enabling environment for doing business. Several sessions of the forum highlighted the business reforms recently enacted with the support of the World Bank Group. In the Doing Business 2014 report, Côte d’Ivoire achieved reforms in four areas: starting a business, construction permitting, enforcing contracts, and registering property.
For example, thanks to the introduction of a one-stop shop (CEPICI), it takes only eight days (previously 30 days) to complete registration. Easier and cheaper channels to start a business are encouraging an increasing number of small enterprises to formalize.
In the area of construction permitting, the new electronic tracking system and the streamlined procedures replaced the informal and corrupt channels, reducing the time and cost for obtaining a construction permit by 20 percent. This helped boost the number of construction permits issued in Abidjan by 155 percent in 2013.
“The reform in construction permitting is reassuring investors to invest and construct in Côte d’Ivoire,” says Mr. Ousmane Coulibaly, the director of the one-stop shop of land and housing, adding that the improved procedures are also helping to improve the quality of construction.
The fee to register property has also been lowered, from 10 to 7 percent of property value, making it less costly to obtain a title for land or a building in Côte d’Ivoire. For the period July to December 2013, the number of property transfer transactions in Abidjan has gone up by 101 percent compared to the first half of the year. And with the creation of a commercial court, businesses now can resolve commercial disputes in a systematic, legal fashion.
Furthermore, a recent amendment to the family law in 2013 was a victory for working women in Côte d’Ivoire. Previously, women were subject to a higher income tax rate than men. Now, they pay the same level of taxes, leaving more money to spend on their families and children’s education.
Gateway to West Africa
Benefitting from Côte d’Ivoire’s improved conditions for doing business, Mr. Soro’s factory is bustling with activity. The business is opening a new plant to meet the high demand, which is being driven by the domestic housing sector developments and large infrastructure projects like the construction of Abidjan’s highly anticipated third bridge, a roughly $350 million project backed by MIGA’s political risk guarantee.
Foreign companies are also increasingly knocking on Mr. Soro’s door. “We receive our primary materials from countries all over the world, including Korea and Spain,” says Mr. Soro. He also supplies cement to projects abroad in countries like Nigeria, Turkey, and India.
With the Port of Abidjan being the largest port in the region, Côte d’Ivoire is well positioned as a hub for international trade. Representatives from neighboring countries reiterated throughout ICI 2014 that Côte d’Ivoire’s rise will aid economic integration in West Africa and the growth of the region as a whole. On the night before the opening of ICI 2014, Abidjan greeted the first double-decker Airbus 380 to arrive in Côte d’Ivoire— a symbol of the country’s reemergence as a major business destination in the region.
But challenges remain for Côte d’Ivoire: ICI 2014 participants cited improving transparency and further reducing regulatory burdens for the private sector as next steps for the country. With the next ICI forum slated for 2016, the World Bank Group is continuing to support investment climate projects in Côte d’Ivoire to help develop the country in an open, sustainable, and inclusive manner.
Updated February 2014