International Trade in Ivory Coast

News Related to International Trade in Ivory Coast

Business outline for Ivory Coast

Main Industry Sectors

Ivory Coast's economy is mainly based on agriculture. The sector contributes to almost one fourth of the GDP and employs two-thirds of the country's active population. Ivory Coast is one of the world's largest producers of cocoa and it is one of the world's biggest exporters of cocoa beans, coffee and palm oil. The country's production of rubber has increased substantially in these recent years.
Ivory Coast produces oil and gas. The oil sector is beginning to have more importance in the country's economy, with a growth rate of 1.2% in 2008. There are some mining activities in the country, namely gold, diamonds and nickel. However, in 2005, the UN Security Council banned diamond exports, which were suspected of financing weapons used in the country's civil wars.

The industrial sector contributes to nearly one fourth of the GDP. The country's main industrial sectors are food-processing, textiles, construction materials, fertilizers, tuna canning, and assembling motorbikes, vehicles and bicycles.

In the last recent years, the tertiary sector has been showing a rapid growth (3.1% in 2009). Services contribute nearly 50% to the GDP. Today, the activity in the telecommunications sector is booming.

Economic Overview

Ivory Coast's economy has been slowly declining since the outbreak of the armed rebellion in September 2002, which resulted in the discontinuation of most foreign aid (except humanitarian aid), thus increasing the domestic and foreign debt and causing a drastic reduction of foreign and domestic investment. Ivory Coast's economy revived again in 2007, with a growth rate of around 3% in 2010. However, the population's standard of living has continued to deteriorate since 2002. Almost half of the population live under the threshold of poverty. Ivory Coast's economy depends largely on exogenous factors, such as weather conditions and the price of raw materials in the international market. Within the context of the economic crisis, the economic activity of Ivory Coast resisted very well. Even though the unemployment rate has increased (nearly 16% in 2009), inflation has remained under control (around 3%).

The political situation in Ivory Coast is the main barrier to the economic development of the country and the continuation of the presidential election for 5 years (since 2005) has been cumbersome for the country's global situation.  The presidential elections that took place at the end of 2010 reflected also this political chaos.  These political tensions have a strong influence in the economic situation of the country and undermine the investors' confidence, which can become a hindrance to the country's economic situation in 2011.

FDI in Figures

In 2008, Ivory Coast received USD 352 million in foreign investment, which corresponds to an increase of 5%, compared to the figures in 2007. In 2009, the total amount of FDI was close to USD 427 million. However, the political situation has a great influence in foreign investment and its current instability has created a freeze on investments.  One can come to the conclusion that in 2011, foreign investments will be very low due to the political situation at the end of 2010.  France remains the country's main foreign investor,  even though China is becoming an increasingly important competitor, since China has made a remarkable entrance into the African continent.

FDI Government Measures

The Ivorian government has established a number of measures to promote foreign investment:
- a one-stop shop for company creation;
- greater investment protection;
- a major works' program for road infrastructures, in particular with the privatization of the Abidjan - Ouagadougou railway line.

In the face of the economic development challenge, Ivory Coast has committed itself to making the private sector the growth driver in the coming years. Consequently, the authorities have recently established substantial tax reliefs in order to create permanent revival conditions in the private sector. Despite these measures, the private sector considers company taxation still to be restrictive and that the business climate remains unfavorable to investment. For more information, refer to the African Economic Outlook website

Country Strong Points

The country's main strong points are:
- A skilled workforce; and
-  A rich sub-soil and a favorable climate for agriculture.
Ivory Coast is also an important financial area in West Africa.

Country Weak Points

The country's weak points are:
- Its highly significant debt;
- Political instability;
- Red tape;
- Corruption problems; and
- The poor condition of infrastructures.
Ivory Coast is also one of the least competitive country in the world. In 2008-2009, the country was ranked 110^th over 134 countries, according the World Economic Forum global competitiveness indicator.

Foreign Trade Overview

Ivory Coast is the hub of commercial activities in West Africa. The share of foreign trade in the country's GDP is 90%. Ivory Coast is a member of the UEMOA (West African Economic and Monetary Union, which enforces a Common External Tariff (CET). It also belongs to the Free Trade Zone.  Ivory Coast has also signed a stepping stone economic partnership agreement (EPA) with the European Union (EU) in November 2008. This agreement essentially aims to maintain the preferential trade system which exists between the EU and Ivory Coast.

The three main export partners are Germany, Nigeria and the Netherlands. The country mainly exports cocoa (40% of its exports revenue), mineral fuels and oil, vehicles, wood, ships and boats. Ivory Coast's three main import suppliers are France, Nigeria and China. The main import commodities are mineral fuels and oil, vehicles, ships, boats, cereals, and machinery.

In 2009, the trade value dropped by almost 10% in relation to the previous year. This situation can be explained to a large extent, by the effects of the international crisis on the economies of Ivory Coast's main trade partners. This situation should improve in 2011, unless the political situation remains tense.